It working just fine. The light tells you the gas heater is trying to ignite. Once it is lit and producing heat the light goes out. If it does not go out you have a problem...no gas...igniter failure...etc. the light only comes on when water temp goes below 110degrees. This is controlled by a thermostat device at the tank so it can be inhibited for quite awhile...until tank cools considerably. Sounds like you're in good shape!
Cedar Creek 36CKTS
F350 Lariat ("Big Blue")