Furnace/water heat vent

The smaller vent is the water heater. Is the T-type connection acceptable? The plastic bushings at the water pipes are melted, I am thinking that the T vent is allowing the furnace to blow the hot combustion air back out of the draft hood at the water heater. I did not get any CO reading, but the furnace was not on either.

This vent should be a Wye connector.

Thanks David, that is my thought also.

Anyone have any Any code reference handy to these issues?

I don’t have any code reference, but it makes sense for it to be a Y connector.