This water heater business all comes from Article 422.
Cord and plug connection is here
422.16 Flexible Cords.
(A) General. Flexible cord shall be permitted (1) for the connection of appliances to facilitate their frequent interchange or to prevent the transmission of noise or vibration or (2) to facilitate the removal or disconnection of appliances that are fastened in place, where the fastening means and mechanical connections are specifically designed to permit ready removal for maintenance or repair and the appliance is intended or identified for flexible cord connection.
(handbook commentary)
It should be understood that a cord-connected appliance is required to be specifically designed, mechanically and electrically, to be readily removable for maintenance and repair.
The disconnect is here
422.31 Disconnection of Permanently Connected Appliances.
(B) Appliances Rated over 300 Volt-Amperes or 1/8 Horsepower. For permanently connected appliances rated over 300 volt-amperes or 1/8 hp, the branch-circuit switch or circuit breaker shall be permitted to serve as the disconnecting means where the switch or circuit breaker is within sight from the appliance or is capable of being locked in the open position. The provision for locking or adding a lock to the disconnecting means shall be installed on or at the switch or circuit breaker used as the disconnecting means and shall remain in place with or without the lock installed.
