The valves are set to use the hot water heater normally.
You have three ball valves. With the handle aligned with the tubing the valve is on. The two valves in and out to the water heater are on. The third valve in the middle has its handle cross wise and that means it is off which is what you want for normal use.
To set for winterizing bypass, you turn the two outer valves crosswise and the middle valve aligned with the tubing so water/antifreeze bypasses the water heater.