The GP Sensor would need replacing yes , and also you can find some on eBay UK and eBay USA as these are still good 250cc markets , however be cautious using hyo sites that are blue and white , some riders on this forum have complained a lot resorting to asking PayPal to sort it out for them , unless they have genuine stock issues then they should give you an update.
A GP switch acting fishy does trigger the FI light as the ECU is expecting it and it assess (or guess as best as it can) to ascertain if you are in Neutral or Some other gear before starting, hence EFi versions have 5 contacts on the switch itself , carb models are not suitable as they are hit & miss with some 250 ECU’s – The carb versions have 1 contact point that says “Neutral On” or not , the CDI doen’t doesn’t typically care to sense if you are in Gear 5 or 1 , the EFi ones would , it helps with timings on the rest of the electronics.
Don’t throw it away, it will be a handy backup. Sometimes it does come back to life briefly – Get yourself some “stainless steel” bolts and a fresh O-ring if possible, that gearbox drum behind the sensor chucks a lot of oil!