He is probably installing a recirculation pump on his tankless on demand system. No it does not run all the time and is actually a “greener” way of delivering hot water as your not letting water run down the drain until your hot water shows up.
If your neighbor is only using his place on weekends or seasonally he is most likely saving some money using a tankless system. If he is living there full time not sure tankless is the best way to go unless space is an issue.
Google Chilipepper recirculating pump for an explanation on how they work as I am not a plumber but am a little familiar with them.
Sounds like your neighbor has a good responsible plumber.
Dan
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