You can definitely change a sensor's type, but my recommendation is to change it as close to the sensor as possible.
I use zigbee2mqtt (so I don't know if this applies to z-wave), but to change the 1 or 2 devices that were wrongly detected on my system, I changed them in zigbee2mqtt first and then HA will use the corrected data.
If I corrected HA, then corrected zigbee2mqtt I'd have to do this twice, plus I presume HA wouldn't automatically pick up any other changes I made to that sensor because it had been overridden.