The reason why the increased IR sensitivity for the hot spot detector is not possible to simulate:
1. There are no true hot spots in-game.
2. To check for a hot spot the sensor would have to interrogate everything in its FOV (Field-Of-View), both terrain and objects.
3. This interrogation would take too many computer cycles and will severely hit DCS overall performance, not only on FPS but on everything else and it may even bring down DCS by grabbing all computer resources on mid or low end computers.
4. It is easier to just interrogate the active vehicles list to see if the vehicle is within the sensor's FOV.
I talked at length with ED's development team about the hot spot detector. I even proposed to have it also get buildings and some scenery vehicles, but they said that the problem is to do that they would have to go back to interrogate the entire environment again. DCS does not have a scenery list. It does have an "Active Vehicles" list, because those are under DCS and player control, and only active vehicles have the "heat" value that can be used for it.
So, in order to create false positives, which are not that difficult to discern anyway, both ED and us must find a way that does not impact DCS performance.
The hot-spot detector can only show up to 10 spots on the HUD or MPCD. What the false positives do is fill these 10 slots making possible for you to miss a real target that could not be displayed because the slots were all full.
This video shows the hot-spot detector in action. The "V"s are spot with a higher temperature than the surrounding area.