to be honest I cant see enough of the heater pipes to comment fully.
BUT there does not seem to be anything fundamentally wrong. as long as there is the small hole in the side of the thermostat.
the bypass hose is not need.
for the set up you have the correct routing is the heater tap (left side of head) hose to the heater in the car. heater hose to bottom hose between rad and water pump. this is just the same as any early 1275 which is why many drivers can be seen sweating in their Minis with the windows down and the heater on full blast when the weather and the engine gets too hot.
the water still flows round the engine with no problems. when the heater is off but you can het a hot spot around number 4 cylinder.
to me it sounds like the lack of use could be the issue and a good flush of the system and then the use of some cleaner would be advised.
for example https://www.louis.de/artikel/motul-…dde3a58d5f6ef77