Earlier quoted context omitted.
The big difference with VW is that they put in a mechanism that detects the test and completely changed the behavior of the car for the test.
So they _intentionally_ set themselves up to lie to regulatory agencies and consumers about real world efficiency. That honestly sounds basically the same to me. In both cases the tests are poor approximations, and in both cases someone could accidentally optimize the test, and in both cases someone did it intentionally to deceive people.
I think this is what I disagree with.
The water heater story is about a viable-for-market design which also optimized for the test. The equivalent for a car emissions test might be optimizing the transmission to reduce emissions at the specific speeds which will be tested. Those speeds could be sweet spots of the engine curve by accident, or they could be planned that way. I don't think that's necessarily right, but it's within the bounds of "natural" design for the product.
Instead of doing that, VW submitted something for testing which was fundamentally different from what went to market. Rather than being misleading, the test results were fundamentally irrelevant. Creating two completely different modes of behavior isn't something you could do by chance, and it means there's no real limit on how badly they could cheat.