Hot water scalds faster than most people expect, and the difference a few degrees makes is considerable.
Water stored in a hot water system is deliberately kept hot enough to suppress bacterial growth in the tank. That temperature is higher than is safe to deliver directly to a bathroom outlet. The device that resolves this is a tempering valve or a thermostatic mixing valve, which blends hot and cold to limit what reaches the tap.
Australian requirements set a maximum delivery temperature for bathroom outlets, with a lower limit in settings used by young children, older adults and people with disability, because those groups burn at lower temperatures and in less time.
These valves are mechanical and they do fail. The symptom is water arriving hotter than it should, or temperature that fluctuates rather than holding steady. Neither should be treated as a quirk of the system.
If water at a bathroom outlet is uncomfortably hot to the touch, that is worth acting on rather than adjusting around.
If a hot water system is leaking, making unusual noises, or delivering water hot enough to scald, switch it off at the isolation point if you can do so safely and call a licensed plumber. Tempering valves and pressure relief valves are not do it yourself items, and a failed relief valve can be dangerous.
