From ST guidelines ..

The recommended 4mm2 wire for 20A mcb to Aircon & water heater..

I suppose if you install new might as well use the recommended sizes.

i used 2.5mm2 for water heater and aircon when i renovated yrs ago so better confirm with your wireman if you want the 4mm2..

Agree ..

The RCBO combines both mcb and rcd in one device..

For water heaters better use a 10mA RCD or 10mA RCBO per ST guide.

RCCB (residual current circuit breaker) & RCD (residual current device) is the same thing and operates via trip relay current difference in mA betw live/neutral. No need earth wire to operate. Installed in DB..

ELCB (earth leakage circuit breaker) operates via voltage difference and needs an earth connection to operate..which is factory installed in instant water heaters cause cannot let the leakage current electrocution risk. So a low Impedance earth connection is important.

old houses sometimes have them (big black fuse switch with a yellow button) but regulations now is RCD's ..