The small rocker switch on the outside section (lower left) of your water heater works the 110v element of your water heater, as well as the 110v breaker in your converter box.
The lighted rocker switch on the inside of your camper works the propane system. There should also be a 12v fuse in the box to work the igniter for the propane system, so that can work during dry camping.
Both systems are independent of the other, but can be used simultaneously if you want quick heat up.
Make sure both systems are off.....and especially the 110v element.....if you are going to empty the water heater for any reason. A dry 110v element will burn out in a heartbeat.
Chap , DW Joy, and Fur Baby Sango
2006 Ford F150 Super Cab 4x4
2008 Surveyor 263