Welcome to the forum!
Your water heater on "Electric" will only work when you are plugged into shore power or have the generator running.
And like was said, the switch with the click is the Store/Use switch. With it off, your coach battery won't charge. If you store your coach with it on, there is more drain on the battery and it will soon be dead. Those deep cycle batteries aren't supposed to be drained completely.
I check my coach every couple weeks when it's in storage, and I run the generator for 15-20 minutes. Then, back to store. I don't have an aftermarket disconnect device. Still running the original Harris batteries after 4 years.
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