The bit you've missed is that the Honeywell motorised valve is what switches on the boiler and pump (via the Orange wire) UNLESS the heating is OFF and there is a call for heat from the HW cylinder stat.
The 'touching' wires should definitely NOT touch! If you have a two-wire room stat (as has been pointed out) the connections should be programmer - CH ON to 'stat - common and 'stat - call-for-heat to the White connection to the 3-port valve. Isolate the other wires in the roomstat individually.
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