I suppose they could pull a properly sized feeder and install a small subpanel to an area within sight of the equipment, then run the needed branch circuits to the water heater from there. One thing though… I know that the SQD QO 6/12 circuit panels I have are only rated at 100A, so not sure if they are available with a higher ampere rating. If not, then one possible problem might be if the feeder were sized only as needed for the water heater loads but, a larger panel was install installed because of the needed higher ampere rating. Someone else could come along later and run additional circuits out of it to feed other loads.
I agree that if there is a sub panel or service panel within 50/eyesight, then we would meet the code. However the service is in the basement and the house is finished, and they install a new water heater in the laundry room, Now what? Could you accept a lockable breaker(s) for the disconnect? Install a sign on water heater stating that the heater has multiple feeds?
This might be the compelling reason to put the sub panel near the water heater. I know the code allows lockable breakers, how many homeowners actually understand LOTO procedures or have the proper equipment?