I meant backdrafting. Note in the photo galvanized pipe shows rusting, so the flue interior is wetter than the apparent age of the pipe would indicate. This to me is clear sign that the flue interior gets wet, doubly so given the position of the rusting on the heater top itself.
If it were a pipe peak instead, it would be concentrated on the hot or cold side.
Observed problem: rusting, clips no longer holding.
Observed issue: insufficient vertical rise before elbow.
Proposed mechanism: excessive flue moisture to to poor draft, causing rust.
You want as much rise as possible, but I know of no rise requirement. Sure, it could be a cause, compounding or contributing problem, but I would but put all my eggs in that basket. I would likely leave that out and just mention the moisture/rust which indicates a potential draft issue. My two cents.
I would report something like…Venting configuration for water heaters, furnaces (or gas appliances) does not appear to be sized and configured for good performance. There is evidence of excessive condensation and other problems. Evaluation and correction by HVAC and plumbing technicians is recommended.