did you fit it yourself? if so, then I suggest you can take them out again and take a look at the terminals. There should be 2 inlets(L1 & N1) and 2 outlets(L2 & N2). The fact that the neon is lighted is because the incoming (live and neutral) is at the other end of the terminals. Just switch them to the opposite sides, then all should be fine. look at the instruction manual in the package. It's nothing wrong with your connection, just "terbalik". Just make sure that the incoming live(L1) and neutral(N1), is coordinated with the outgoing live(L2) and neutral(N2). If you are not sure, get an electrician to help you. but always take care and not criss cross the live and neutral...

regarding your water heater "earth" led, what is it? the earth connection in the switch is apart from the other terminals. But I don't think you fit the earth wrongly, if so, it would have tripped the ELCB...