Brad, I have one of those heaters with the cable operated narrow vertical door and the manually operated defrost lever.
I always assumed that pulling on the cable knob opened the narrow vertical door while at the same time closed the bigger door, preventing outside air from coming through the lovers in the outer side cowl. In other words, the narrow vertical door will then become the intake for the heater, essentially changing this heater from a fresh air heater to a recirculating heater.
Am I missing something? (I often do.)
Carl