Thank you to everyone who offered advice. Here is an update in case you are interested:
I watched the tankless operate a few mornings, noticing that it had difficulty lighting a fire and staying lit when it was called to heat. Often the unit would error out in the morning, and I would have to restart it. Afterwards, the tankless would fire a few times and eventually stay lit.
In addition, it did not light when the circulation pump turned on.
Since I had already replaced the igniter a few months ago (parts are expensive as it is far out of warranty and the company went bankrupt), and I knew the cost of replacing the water sensor was high, I went ahead and looked at a new tankless vs a tank to replace it.
We installed a new tankless and even without the circ pump there is more than adequate hot water to all faucets. The new tankless is currently set to 120 and it is hotter than the old one which was turned up to 135 to accommodate a dying unit.
Thank you
David