The water heater bypass valves set (which can be anywhere from 1 to 3 valves) are designed to tie the cold water line into the hot water line during winterization. This allows you to pump antifreeze only into the cold water line and it will also fill the hot water lines with antifreeze at the same time if the bypass valve is open.
Now, hence the cold water line and hot water lines are tied together, it would also fill the hot water heater with antifreeze (6-10 gallons worth depending on your water heater tank size. So to keep this from happening, there are valves to block the water heater inlet lines and outlet lines. The valves are open when the handles are parallel with the line, and closed when perpendicular to the line.
So, when you get ready to use the water heater, you have to open the cold water inlet valve, open the hot water outlet valve, and CLOSE the bypass line between the two so the cold and hot water don't mix.
If you just open a hot water tap on your trailer, if the bypass line is open (but the inlet/outlet valves are closed), then you will get water out of it...but it's coming from the cold water line, not the actual hot water outlet from the heater.
As you see in the diagram below for normal use, the inlet and outlet valve handles are open (parallel with the line) and closed for the bypass line (perpendicular to the line).
If you open the pressure relief valve and only air is coming out, then the inlet and/or outlet valves are closed...and there is no water in the heater. If you turned on the electric element like this, then it's most likely toast unless the hi-limit thermostat tripped or burned out first. It will most likely need replacing.
This may help.
Suburban's electric switch and much more