Yep the switch is either for the Fireplace or the Hot water heater. When it is in the hot water mode you still have to turn on either the gas or the electric for the water heater to work. When in Fireplace mode you can turn on the gas switch and it will heat the water.
2011 jayco 33rlds, 2002 Ford excursion, v-10, 3:73 gears 4x4 mine. 2008 Suzuki sx-4, hers. Retired Air Force, now Retired.