Who knows? Either way that t-p needs to be open to atmosphere for safety,,,, strange,,,,
Looks to me like the popoff is plumbed into a copper drain line.
The tee to the 1/2 line is pressurized as long as the hose bib at the bottom is closed. So the pop off is still functional.
The question is what is the 1/2 in. line into the wall and back out then plumbed into the tank drain with a hose bib on the end of the line.
That line would be putting out hot water. The 1/2" line could be teed to another line in the wall. It would be easy enough to remove a little drywall and peek in to see.
If the gate valve on the 1\2" line is open hot water is flowing somewhere. I can't really think of any reason for the line being plumbed back into the tank unless it was some attempt to keep the hot water mixing in the tank. But in reality that would not occur either.
I assume you have opened the hose bib to see if it plumbed into the other 1/2" line in the wall.
That said that is some mangled up plumbing on the top of that heater.