On our diesel Universal marine engine, moving the water heater from the "in series with the heat exchanger position" to the Thermostat by-pass made it possible to go at the boat hull speed continuously..
Above are the steady state temperatures at various speeds before and after the changes. The original red line is with the original 3 GPM Oberdorfer. the blue line after the 6 GPM Sherwood was added. The green line is after the water heater was moved. Westerbeke calls this the "positive flow, hot water heater connection in the thermostat bypass circuit"