That is in 'bypass' position (no water going into WH Tank)
Water can flow thru cold line (blue) up thru bypass line to hot line (red). Check valve in brass fitting on tank stops water from going backwards into WH Tank.
When ready to use...turn handle 1/4 turn so handle is aligned horizontally with the cold water inlet. Water will flow into tank at bottom and out at top to hot water lines.
Just like the one in picture I posted.
SW6P......
You have to turn gas control knob to pilot position/hold down and light pilot flame. Then turn gas control knob to ON position
Just surprised RV didn't come with direct ignition vs pilot flame