[JRTJH]

It looks like you have propane "burning at the air inlet ports" on the mixture sleeve. I'd guess the burner jet is blocked or corroded and the gas is "flowing from the valve, but can't get through the burner jet, so it's backing up and burning in the tube.

Easy fix, but you'll need to disassemble the air mixture tube, burner tube and ignitor, clean all the parts and put it back together again. After reassembly, you'll need to adjust the air mixture to get a clean burning flame.

There are a number of U-tube videos on how to take it apart, clean it and reassemble.

Don't keep using it like it is, you'll melt insulation from the wires, plastic parts and wind up with a "it's cheaper to replace it than repair it" water heater.