The bike is wired for oil-pressure sensing. The motor is equipped for oil-level sensing.
The two sensors work opposite of each other.
Low oil press is closed. Adequate oil press is open.
Low oil level is open. Adequate oil level is closed.
I think Kawasaki's reasoning was, if the oil pressure light goes on due to lack of oil, it's already too late. So they made it an oil-level warning so you would get an earlier warning. Kz550's rarely have oil pressure issues for normal use ( racing aside), so the main worry is running low on oil.
Your options are to disconnect the wire and have no indicator, or install a pressure switch into the oil pan. or install a pressure switch into the main oil gallery plug, or use the oil-level sender with an inverter circuit. I think the best option is to install a pressure sensor into a plug in the main oil gallery. Someone probably has pictures around here for that. Search Corey Clough's posts. He may have done it. I know he added an oil-temp gauge and maybe a pressure sensing port.
Regarding oil pan options...
You can add an oil pressure switch to the ZX oil pan, but you will have to remove the pan to do it.
You could also install a pan from a 1981 Kz550D1 (Gpz) or maybe even a Zr550B (Zephyr), to have the oil-pressure port already drilled and tapped (and still have oil cooler ports).
Here's a link with all of the oil-pan variations that I know of.
s3.amazonaws.com/gpzweb/OilPans/Kz550oilPans.html