Looks like it could be a convenient place to begin tests. Some simple testing of the wheel and sensor may reveal if it could be functional, before modifications to install the V8 wheel and new sensor. If no joy, one of the advanced ATS or similar sensors could be easily mounted inside the housing with room to spare, as a backup plan.
While a simple adapter bushing could be made on a lathe or maybe high-temp 3D, I have also used high-temp structural epoxy paste to create a form-in-place bushing and simultaneously anchor the little wheel. That's a fancy way to say I glued it in. Mix and apply the paste, verify centering and no wobble, and let it set until cured. Don't like it? Pop it out and remove remaining material with a tool or wire wheel. Have fun!