Is there a code violation to install disconnect switch underneath the sink to serve instant water heater?
Some might say that violates the working clearances required around electrical equipment, or that the disconnect is not readily accessible. But I believe there is an exception that the disconnect doesn't have to be readily accessible if the equipment it serves is not readily accessible.
So I would give it a thumbs up.
I believe a permeant locking device at the branch panel circuit breaker would also be permitted in lieu of the disconnect at the heater. But I haven't looked in the book to confirm either of these rules.