said by Kearnstd:yep the blowoff safety is that pipe that is partly in the left side of your red box.
The reason it should have a pipe and that aims down to the floor is that its purpose is that in the event the thermostat on the WH fails and gets stuck in operational mode it will release the pressure of the tank in a safe manner. Well somewhat safe and that is what the pipe does, because when that baby does have to let go boiling water and steam will blast out of that valve. I do not know if such is code but it is more of a safety thing.
Makes total sense. Thanks for the heads up.