Hot water should be pulled out of either the block port (currently labeled as "heater outlet to block") or cylinder head and then returned to the water pump. In the US, the hot water was pulled out of the cylinder head (currently labeled "heater inlet here"), but the block port works too.
How yours is currently set up, it is pulling hot water out of the block, passing it through the heater core, then returning it to a tee fitting that is returning the water back to your water pump via the external bypass. The reverse of how you have it labeled. Switching your hoses on the heater inlet/outlet might help increase flow.
Coolant goes through your intake manifold to warm it up on cold days an prevent icing. From there a line comes out the back of your intake manifold, tees with the water coming from the heater, and returns to the water pump, acting as an external bypass to help prevent cavitation before the thermostat opens.
If you tried to route it by pulling water out of the head, and putting it back in the block, then it would probably mostly sit stagnant. Pulling it out of the block, or head, then letting it route back to the external bypass is the OEM way it was done and should flow pretty well.