I think Poconos is on the right track. I would believe "water hammer" to be caused by a blockage of the flow (like shutting off a faucet). You don't have that when the pump quits....just a loss of pressure.
I wonder if that internal bypass in the heater is coming in to play somehow?
As an aside, I would question the PB further on the external bypass. It seems it could at least be used to keep the sytem operating if you ever had to remove the heater....it may have another function as well.
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