I realize this post is old- We just got a pentair mastertemp 400. I looked up the manual and believe the bypass valve is not used to bypass water when the heater is not being used. In fact from the design- it appears that when the flow increases- as it will during the heater usage- excess flow is diverted away from the heater core. So during normal operation- mid to low speed- no water is being bypassed and flowing through the heater.
- the external bypass as described here (
Pentair MasterTemp Heaters - Further Reading )- is necessitated when flow to the heater might exceed 120 gpm .