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Hot water use equipment has a target faucet temperature which is lower than the hot water supply temperature from the water heater. Rarely does one have the hot water valve on full with the cold water valve shut when showering or washing hands at a faucet. Target faucet temperatures are 95°F-115°F depending on the use, while the hot water heater setpoint temperature is usually around 120°F-140°F to avoid growth of legionella bacteria. The simulation is accounting for this mixing, and water use values in your equipment specify mixed water use rate (cold + hot), not hot water use rate.
Hot water heaters are also connected to a loop, and if you are seeing a difference in tank outlet temperature and loop supply outlet temperature, my guess would be that you have a pipe bypass for your demand equipment and a constant volume pump running water through the loop continuously. This would mix and lower the hot water temperature from the tank outlet.
The dip you are seeing in hot water tank temperature is possibly an artifact of the specific output variable you are using. Are you using the WaterHeater:Mixed
or WaterHeater:Stratified
object? And which of these output variables are you using to signify hot water heater temperature?: