In that case, I would assume they’re talking about how cold the incoming water would be.
I used a tankless in a zone five area where our incoming water in the winter was often below 60 degrees. You’ll have to compare the charts of input temp and output GPH to determine how it would work for your specific use case.
I used an indoor mounted one, but there are tankless models intended for places like CA and AZ where they can be mounted outside.
We liked the endless hot water - we only had one bath and three people, so we offer were bumping against the 60 gallons of our old tank model.
Our biggest issue is that we have a huge hot water heater that takes up a whole closet. We like to down size. An indoor one would be fine. What are zones?
That’s why we installed a tankless unit, it freed up an entire utility closet because we were able to tuck it in to a pretty small space while still respecting the required clearances. The only downside we’ve had was initial cost, and the yearly flushing process, which really isn’t bad if you install the correct valves from the beginning. Takes about 30 min. a year, which is worth it for endless hot water. Our gas bill has also been lower too.