Sorry for the long post:
There is a complete misunderstanding of the excessive flow shutoff device posted all over the Internet. The misunderstanding is both where it is located and how it is designed to function. There is no reason to open your propane cylinder valve slowly. Therein lies the misunderstanding of this device. I certainly don't mean to ruffle anybody's feathers. I just like to jump on this when I see it because this information is wrong and causes a lot of misguided troubleshooting that often arrives at the wrong conclusions.
The excessive flow shutoff valve is not located in the propane cylinder it is actually located inside the plastic ACME nut on the "pigtail" line that connects the propane cylinder to the regulator. This excessive flow shutoff actually has two functions. Yes, it does shut the main flow of propane off in the case of excessive flow such as a propane line break. However, it only shuts off about 90% of the propane flow. It is that 10% flow that continues that is part of the second function of this shutoff. This second function is to pressure check the system. Here is how that works:
Lets assume that your propane system is at low or at zero pressure. This would be the case if the cylinder valve was off for a long time, a cylinder was removed for refill, or there is a leak in the system. So the pressure in the RV system is low or at zero. You open the propane cylinder valve normally as you should (NOT slowly). So, what happens is that the propane gas flowing into the low or no pressure system closes the excessive flow shutoff...immediately, as it is designed to function. It is not likely that you will hear that very subtle click. If you do hear it that will be immediately as you open the cylinder valve. With the excessive flow shutoff closing off 90% of the propane flow the remaining 10% flow continues into the system. The purpose of that 10% flow is to pressure check the propane system. If there are no leaks in the system, that 10% flow, depending on the size of the system and if there was any pressure in it to start with, will pressurize the system in 5 to 10+ seconds. When the system pressurizes the pressure equalizes across the excessive flow shut off and you will hear a big click. That click is NOT the excessive flow shutoff closing...it is the shutoff resetting (opening) and allowing full flow into the system. There is no reason to open your propane cylinder valve slowly. You shold open it normally and let the excessive flow shut off do it's job as designed!
I have done a lot of research on this and have interviewed some experts in the propane industry. I am writing a paper on the propane system for propane cylinder systems. I may or my not continue into large "tank" systems. That paper isn't done but I can post the section on the ACME "pigtail" nut and it's excessive flow shut off if there is any interest.
To, kind of, address the OPs water heater problem. I do not know if the water heater problem is related to the excessive flow shutoff. However, I have given demonstrations where I simulate a leak in the system (open a stove burner with the propane cylinder valve closed). Leave the stove burner valve open and open the trailer for ventilation. The system is now at zero pressure. I open the propane cylinder valve normally. The propane gas flowing into the system activates (closes) the excessive flow shut off. The valve does not reset and there is no click 5 to 10 seconds later because the continuing 10% flow cannot pressurize the system with the stove burner open (simulated system leak). My trailer is now operating on 10% flow.
I go inside and light that burner, just to burn the gas and not continuing with raw gas escaping. If I did shut the burner off the system would pressurize and the excessive flow shutoff would then reset (click) and allow full flow. With the stove burner burning on 10% flow I light off my water heater. It lights fine. However, I do not know if the flame is big enough to heat water, but it was big enough to satisfy the probe that a flame was present. It did sound quieter than normal. Now with the burner still lit and the water heater still lit I fire off the furnace. Nope! It tries to light, goes through the cycles and shuts down.
Now I turn off the burner, the water heater and the furnace. No leaks in the system so the system pressurizes on the 10% flow and the excessive flow shutoff "clicks" and resets. I now have full flow and can light all burners on the stove, fire up the water heater and furnace, all at the same time, and everything now functions normally.
Note: I have a auto switching regulator with the red and green flag. I noticed that the flag would turn green even on the 10% flow with the simulated leak. If I turned the cylinder valve back off (with the stove burner On simulating a leak) the flag would immediately turn red. If I repeated this with the burner off (no leak) the flag would stay green when the cylinder valve was closed. So, on my trailer at leased, this could be used as a quick visual leak check.
Again.....Sorry for the long post.
