Bad picture
need a better picture.If there is no explanation of the switch on the panel then it is likely a non-factory add-on. It's not the water heater, the water heater is the breaker lower left.There are accessory breakers on the panel therefore it seems odd that someone would add one, unless it HAD to be a 120v 3-way. The only 2 logical explanations I can come up with is that there are multiple 120v sources, IE: doesdid the boat have a generator or alternate shorepower receptacle? Or it's a reverse polarity switch.