and the water coming out of the pipe (which was visible) . . .
I mean that the end of the pipe with the water coming out of it was visible. You can see what I mean in some of the photos posted here. The photos showed that the water went back into a large plastic tank which was somewhat transparent. Sort of like the one shown here:
http://www.plastic-mart.com/pr…ttled-ibc-tote-ce-275tote
I gather you could see and hear the water going back into it.
That kind of tank is not airtight, which is why we know the pipe going back to it had to be gravity return. That, in turn, tells us the pipe was mostly empty. You can only have a full pipe if the entire circuit is airtight and pressurized, like an old fashioned hot-water radiator circuit. If you were to pressurize the water in closed circuit with that tank, the water would all spray out from under the lid of the tank.
Penon's schematic shows the flowmeter is on the return pipe.
Even if the flow rate had been as high as claimed, a gravity return pipe of that diameter with that flow rate would be mostly empty. You can determine the pipe diameter from the flowmeter specifications, and you can look up the maximum capacity of a pipe of that diameter used for drainage with gravity only and no pump. You will see the pipe can carry much more water than Penon's tables show.