That confirms it. The smooth portions along the center of the picture area should be rough and rugged like the other portions. The anode passivated and then corrosion commenced and broke through parts of it.
Las Vegas has moderately hard water, I think. One of the theories is that naturally soft water, like snowmelt, causes passivation. I thought you might be in the Rockies.
Anyway, passivation is a wild-card thing, where the corrosion engineers can rattle off a list of things they think cause it, but nobody can say which of them, if any, applies to a given situation. There, they are just guessing.
As far as replacing the heater, I just don’t know. The anode is clearly working now, but nobody can say how long it sat idle, or what damage might have been caused then.