Thank you all for your responses, much appreciated.
I wrote to Tom Kellogg, he seems to think there is no risk of failure:
"That can't be fully repaired because replacing the seat stay is both very expensive and it would have a huge downside of warping the seat tube significantly. There really...
Yeah it was clearly hidden on purpose, since the sensor was too far in the back, it needed to be on the fork to work and that's how I discovered the dent.
I aquired this 1990 Titanium Merlin a few days ago and unfortunately I discovered that the seat stay is dented in a place that was hidden by a sensor.
How serious is this dent? Is it safe to ride the bike with it? Can it be fixed and is it worth fixing it?
Thanks