The pressure switch actually turns off when there is sufficient line supply pressure and no flow. It is the drop in pressure when the shower or sink tap / valve is opened and the outlet flow line pressure drops in relation to the supply pressure. Hence it is called a differential pressure control. If the flow through the heater is restricted for whatever reason, then there will be insufficient pressure difference across the control and it will not operate. There is no flow sensor, it works entirely on pressure.with reference only to the instant water heaters, as far as I know there is only a pressure switch which will turn on when there is sufficient pressure assuming there is sufficient water flow in the design parameters and the calculated restriction of the shower head typically included as a set.
Storage type water heaters are an entirely different device. There is no pressure switch, the control is thermostatic and maintains a set temperature. They also SHOULD have over temperature protection, plus they MUST have a pressure relief valve, as the pressure inside the tank increases with the temperature.
Although storage heaters are available here, the most common type of water heater is the instantaneous type, and the better quality units are multi outlet types suitable for several outlets. I believe that there is a small type of appliance that is a combined shower and heater, but it is not very common, and I doubt very efficient either.