If water is low do to a leak, why doesn't the gage go up?

A quart can go unnoticed in some cars, and some coolants expand that much between hot and cold.,, proper workings is the excess coolant keeps going back and forth to the plastic expansion bottle from hot to cool always keeping the system solid coolant with no air bubbles. the rad cap is a two way check valve if looked at closely

The sensor is supposed to be covered by coolant for it to actually work. Low coolant level .... and the sender doesn't actually "see" coolant on it and it might even read cooler than normal. Cool readings are even more damage-causing than hotter readings, provided coolant isn't actually blowing out the cap or reservoir. Too cool should be investigated quickly!