Bypass valve
When it was found the mk2 heater matrix was prone to exploding. VW did a recall. Rather than replace the matrix that was going to cost them then did 2 things. Put a bit of plastic on the inside of the centre console so if/when it explodes the boiling water would be directed away from the occupants. And fitted an inline valve bridging the in and out coolant pipes in the engine bay. If pressure builds up the matrix, the bypass valve will release the pressure and from the matrix by routing some of the waterflow back into the circle thus by passing the matrix. They then went on to redesign the internals of the matrix and this was what was fitted in mk3 onwards. Any matrix you buy now will be the redesigned improved version, but many people still refer to fitting a mk3 matrix.
When you fit an updated matrix you can remove the bypass valve. As the original hoses were cut to fit the valve you can replace the hoses with those from a mk3, which are still available. Or just fit a small length of straight pipe and clamp it up.
Because the bore through the valve is reduced, now they're all getting on a bit they tend to be silting up with years of poor water maintenance, they block and reduce flow around the system and cause problems.
To see if you have the bypass valve still fitted look in the engine bay, where the two pipes go to the bulkhead for the heater, roughly underneath the coil. If there's a metal cylinder with a smaller pipe running from it this is the bypass valve.
Often left in situ even after the matrix is replaced. When replacing the matrix ensure you get one from a reputable brand. If in doubt keep the valve fitted but it may be worth removing to flush it through.