An outdoor tankless water heater is the same machine as an indoor one in a weather-rated cabinet that vents straight out of its own housing. That single design difference eliminates the most expensive and most error-prone part of a gas tankless installation. No vent pipe, no equivalent length budget, no roof penetration, no clearance-to-combustibles calculation through framing, and no combustion air provision because the unit is already surrounded by outdoor air.
In Frisco that makes outdoor mounting attractive on a specific set of homes: houses where the water heater currently sits in an attic with a difficult vent path, homes where the garage wall is fully consumed, or properties where an interior location would require running vent forty feet through a finished second story. Moving the appliance outside converts a two-day project with a roof penetration into a one-day project with a wall bracket and two pipe stubs.
The reason we still have a long conversation about it is February 2021. Manufacturers publish freeze protection ratings that sound bulletproof, often down to around minus 30 degrees F. That rating is real, and it is entirely dependent on the unit having electrical power, because the protection is a set of small ceramic heaters and a recirculating element inside the cabinet. During Winter Storm Uri, DFW recorded a low around minus 2 degrees F while rolling outages left large parts of North Texas without power for extended periods. Under those conditions the rating does not apply.
The other thing worth knowing is that the unit's freeze protection only protects the unit. The copper or PEX running up the exterior wall to reach it, the isolation valves, and any recirculation return line are outside the cabinet and outside its protection. Those lines are what actually split. A properly executed outdoor install in Frisco means insulated and jacketed exterior piping, valves positioned so the system can be drained quickly, and a homeowner who knows the procedure before the forecast turns.