Only time it can be used is with full hook upd (sic)
We camp at parks with full hookups only about 20% of the time. Another 40% of the time we have power and water, another 15% of the time just power, and 25% just plain "roughing it" (boondocking).
If we run low on power, we use the generator.
If we run low on water, we add water to the freshwater tank using 6 gallon water jugs.
If we fill 60 gallons of grey water, we empty it into our portable tote and make a couple of trips to the dump station, or arrange for the park "honey wagon" if I am unable to do it myself (like this past summer when I had knee and hip surgeries).
The point is, maybe YOU cannot use a tankless water heater without full hookups, but of there are plenty of people who have no issues with the system and actually prefer it over the old type tank heaters. I was on the same bandwagon so while waiting for my Cougar to be built, I bought a new Dometic gas/elect tank water heater and it was sitting in my shop waiting for my new camper. I had a couple of trips planned before I could do the swap, but in that time I actually used the tankless and as much as I wanted to hate it, I found that I liked it much better than the tank type. More importantly, so did my wife. So after 7 months of using the tankless, I sold the brand new tank model I had bought. I just don't see going back to the old way.
Think of it this way; at home do you take a 2 minute "Navy" shower? Hopefully not, so why is taking a shower that way okay while in an RV? I just don't see the point.