Looks like to me too. Point the valve levers both towards the copper fittings.
I'll add my two cents......the valves in the second picture are definitely in bypass mode. Valve handles pointed to the bypass pipe = bypassed, pointed to the coppper pipes normal operating mode.
BTW, pmleist, the purpose of the bypass is when you winterize, with the tank "Bypassed" you can drain your hot water heater, and then put RV anti freeze in your pipes. Saves 6 gallons of antifreeze. A trailer your size should take way less than a gallon to winterize.
MY trailer also has a winterizing kit on it, basically the same type of valve installed in the line between the fresh water tank and the water pump, the third side of the valve has a 4' piece of plastic hose on it. To winterize I stick the hose into the bottle of pink stuff, flip the valve in line with the hose, and turn on the water pump. Makes it very easy to walk around open the valves at each sink, the showers, toilet, etc. till the pink stuff comes out.
2004 Dodge Ram 2500 Club Cab 4x4 CTD
2007 Sunline Solaris T-276-SR: Misty Blue/Cherry
2001 Dodge Ram 1500 Reg Cab 4x4 OFF-ROAD