Fluctuating engine temperature

Is one or both of the cooling fans coming on and off while driving?
If so, did anyone hotwire or bypass any of the cooling fan/s wiring, etc?
85c is the same as 185F which is what I understand is not very hot. The thermostat is probably rated at just about that temperature.
Keep in mind though that the temperature sensor is located at a different location from where the hoses are and is usually screwed into the engine block or intake manifold or head where the engine coolant is located on the side of the thermostat that would be on the side before the thermostat opens.
If the engine temperature and coolant is not actually fluctuating then it might just be a loose electrical connection to/from the coolant temperature sensor or the gauge and/or a faulty temperature sensor or gauge. I would move your temperature gun to where the temperature sensor is and see if you can get a reading there and compare it to the gauge and if it is not the same or close start diagnosing if it is a faulty wire. So try wiggling the wires and see if the gauge fluctuates and if not try a new temperature sensor. Maybe even read the trouble codes and see if the computer has picked up a code for the voltage on that temperature sensor circuit.
Here is a test of the ect sensor on the kitchen stove boiling a pot of water.
The code for it is a P0117 or P0118.

This sounds like an electrical problem between the coolant sensor and the gauge itself. Since it seems almost impossible for the gauge to bounce like that from the actual temperature of the coolant/engine changing that quickly. Check the electrical connections for a loose wire, etc.

If the gauge is actually bouncing or changing temperature more than just a few degrees within a few seconds. For instance changing from 180F to 165F and back to 190F and so forth in a matter of just a couple seconds and actually appears that the gauge is bouncing, it is impossible for the coolant to change temperature that quickly even if the thermostat was sticking. If it bounces that quickly in my mind it is an electrical problem. I would assume you could just hook a voltmeter up as close to the sensor itself as possible and monitor the voltage there and see if indeed the voltage bounces or not. Or try wiggling the wires while the engine is idling and warm and see if the gauge itself moves when wiggling the wires. Or better yet, wiggle them with the engine off, key on run, that way you know the coolant temperature cannot be changing.

That sounds like maybe a loose ground to the cluster.