I assume you are referring to the diagram on page 5 of the Wiring Guide. The reason it does not show terminals 1 & 2 (HW OFF and CH OFF) is that they are not used in S Plans. The Y Plan diagram on page 9 does show terminal 1 as it is used.To be honest I assumed that 1 and 2 were actually not valid.live as honeywell don't refer to them in issue 16 of their book.
Do you mean Terminal 1, which is HW OFF? Terminal 2 is CH OFF.The bottom line, as you suspected, is that I need to tell the OTC that the HW is not in demand so that it won't impact on the heating. The OTC kit from Ideal has it's own relay to isolate the device when HW is being produced, so if 2 on the programmer is a live feed then problem solved.
I take it that you are not using the Ideal Kit. Why not?
It might be a good idea to read the Installation Manual to see how it works. It's not so simple as you appear to think.