A zinc rod is meant to act as a piece of "sacrificial" metal so that electrolysis impacts less critical elements.
The fact that your rod was partially deteriorated doesn't mean that harm would have taken place regarding your waterheater.
Atwoods are galvanized, and do not require a zinc anode. The fact that you offered up some zinc to the great gods of electrolysis/erosion, and they took advantage of a free meal doesn't mean that it served any useful purpose ;)
Jim