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the fuse by the battery is the EFI fuse. it runs the entire FI system (fuel pump, ecu, fuel injectors, spark plugs, the whole bit)
the engine stop relay powers up this circuit
the engine stop relay is controlled by the kill switch on the front side of the coil, and the bank angle sensor on the back side of the coil (basically 12v is supplied to the coil by the kill switch, and the ground is supplied to the back side of the coil by the bank angle sensor, this is why you connect red to ground to bypass the sensor. the circuit that controls the engine stop relay is NOT the 20amp fuse that is blowing on your bike. the circuit that controls the relay is the IGN circuit in the fuse box. it's keyed power, the EFI circuit is not. if the IGN fuse doesn't blow there is nothing wrong with the kill switch, the bank angle sensor, or the engine stop relay)
when you ground the red, you are pulling the engine stop relay and powering up the EFI system. if the fuse blows it's because you have a short in the EFI power circuit. this could be found in MANY place. all fuel injectors, the fuel pump, the ignition coils, etc.
keep this in mind when you look for your trouble, hope this gets you started in figuring out what's wrong.