Jeff you are mis-interpreting
My concern as stated above was having a suction draw from that air intake directly from and within the closed cabinet itself.
There is no pvc extension at all to even the outside of the cabinet.
That is where my main concern is.
The water heater is a high eff model so I am not worried about back drafting.
Bob, you have other issues, that damper is to close to he draft inducer,I am sure the MFG of the unit more than likely called for it to be farther/further away from the draft inducer blower, the way the unit is installed looks bad.