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Heat recovery from the Chiller:Electric:EIR object is applied through two nodes:
These nodes are meant to be connected to a heat recovery loop (where your water heater is located) that is separate from the condenser loop. It sounds like you're trying to connect the water heater to the CONDENSER inlet and outlet nodes instead, which you should not do.
You can find a schematic of an air-cooled heat recovery chiller in the second image of this article, but I will note that heat recovery from the Chiller:Electric:EIR object is only available for water-cooled chillers according to the last sentence in the description of the Design Heat Recovery Water Flow Rate input field.