As I said: A scope is the best way, but not everybody has one. Also high memory isn't necessary as the control of the injection isn't that slow.
To the sensor.....it's no magic, most of the oxygen sensors work on the same principle. They compare the ambient oxygen with the exhaust oxygen and a difference there produces a voltage. The oscillation just comes from the ECU and injection systems that tries to mix it the best way.
Here is the problem: The sensor will be getting lower in amplitude over the time and therefore the ECU thinks that there is less fuel in the mixture (it's lean) and shove in some extra-fuel. That increases the fuel consumption (you'll notice that) and actually isn't healthy for the exhaust system and the catalysator.
As I said the Sensor is just measuring what the ECU control and it is an AC Signal. I doubt that the multimeter is smart enough to know that you want to measure the amplitude/Positive peak.
As far as I remember the TRMS measures the effective voltage (230V on the mains doesn't mean the Max. Voltage is at 230V, but 230*SQRT(2)).
So the sensor won't be bad, but there is a high possibility that you think it's dead when you use your TRMS meter as it shows you the effective voltage.
For example:
If I use a sine of 600mVpp the meter gives me a reading of roughly 211mVrms. If you don't remember/or know that this is the effective Voltage and not the actual Maximum of the Signal.
And regarding the Sensor output....you don't need any advice from the manufacturer to read the voltage
. If it just is cycling for about 200mV or stays high/low with a warm engine...... put in a new one
Maybe check this one for the principle of the sensor. Perhaps you'll understand then what I suppose.