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Sentry mode going into panic mode with a passenger in the car. Help!

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You don't say what car you have, but in some models there is the option to turn off the tilt/intrusion sensor.
Otherwise:


BTW I'd be concerned you were leaving a dog in the car with no A/C on.
Sorry Model Y - It has been suggested I need to turn of sentry then can do intrusion, so will have a look thank you for the suggestion. With regards the A/C, i'm not going to do it in the middle of summer, but currently there is no need for aircon for 15 mins while I pop to a shop.
 
Recently the alarm sounded even though I’d pressed “keep”, which according to the manual should disable the tilt and intrusion sensors. Not sure if this is a bug or they’ve changed how it works intentionally.

Even if I leave the key in the vehicle, it still locks automatically and the alarm is still activated when no one is in the drivers seat.

My new plan is to disable the tilt and intrusion sensors in the security options.

I have a 2018 Model S.
 
Even if I leave the key in the vehicle, it still locks automatically and the alarm is still activated when no one is in the drivers seat.
If you mean the key card, that is obvious. Key card range is less than an inch. The car cannot detect the presence of a key card in the car, unless it touches one of the two sensor fields, B-pillar driver side under the camera or the place directly before the center arm rest.