The holes on the probe don't matter at all, they are just part of the rubber. They can be covered no problem.
I think I know what's going on now:
When you actually tape the probe to the heat tape it is holding the probe closer to the heat tape. This increases contact is giving the herpstat a better reading of the heat tapes actual temperature. Because the heat tape is hotter than the thermostat thought it was it is cutting power to lower the heat tapes temperature.
What is the herpstat's probe actually reading?








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