Water heater thermostat installation question

[sailormed]

I had to replace the original water heater because of a leak in the engine heating coil. The factory installation was very tight and I never looked at it in detail. After taking out the old heater I had 2 surprises looking at what had been hidden for the last 10 years.

First the capacity of the installed WH was 5 gallon, although the Hunter Marine owners manual announces 6 gallon for the H38.
But my second observation is the subject of this thread.

The engine heating loop has a thermostatic control device based on the hot water out temperature. My understanding is that there is a shut off of the engine coolant water when the tapwater gets to hot.

For me a thermostatic controlled WH adds cold water to the hot water out to obtain the desired temperature of water distributed to the faucets.
Look at the picture of my old WH and tell me if this is a normal US installation or if there was a newby at Hunter Marine in 2004 that installed this without really knowing what he was doing.

I have also attached a picture of the installation of the thermostatic control valve of the new WH.