Problem with setting a high temp for an on-demand heater is the heater's minimum flow rate specification. Mine has a 0.7 gal/min minimum to keep running. With many shower heads that is more than half the flow rate. If you set the heater at 140 and mix with cold to get a 110 or so temp out of the shower head, that brings you very close to the minimum flow rate for the water heater. You may end up having the heater shut off, resulting in an all-cold shower.
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