Wasn’t sure where to put this one.
I have never seen this set up before. I ran into a gas hot water heater. The home also had an indoor wood burner installed in the basement. The wood burner went right into the metal chimney. My question is this, is it ok for the gas water heater to also be exhausting into the same flue?
I would treat it like a wood fireplace which really should be on its own flue. The problem is actually with the water heater not drafting properly when both the water heater and wood stove are in use which could result in carbon monoxide entering the house.