The one that looks like a drain screen doesn't look like it shuts any flow to the bypass off.
There's a collar on the inside of the unit that moves down when the t-stat opens and closes the holes on the side. Put it in a pot of water on the stove and heat it up to see if it works. You can use the wife's cooking thermometer (as long as she doesn't see you doing it) to confirm opening and closing temps.
Mike B
