Water softener loop?

[Odyssey]

There is a water loop in the garage of the house we just bought. I figured it was meant for a water softener but if I turn the valve off (upper right) and remove the flex line there is no cold water to any house fixtures but there is still hot water at all the fixtures. If I put a water softener in this loop the hot water wouldn't be soft, correct? Am I missing something?
What else would this loop be for?

 

[JG plumbing]

Looks like it was for a gas water heater.

 

[Odyssey]

Looks like it was for a gas water heater.

I don't understand why that would be. There is a gas water heater 3 feet away from this spot. This is also only 3 or 4 feet off the ground, no room for a pedestal

 

[JG plumbing]

What do you think that steel pipe is?

 

[Odyssey]

What do you think that steel pipe is?

I assumed a drain for the salt water backwash. I am thinking the loop was supposed to be a water softener loop but was plumbed incorrectly and only ended up with cold water??

 

[JG plumbing]

Hard to say man. I don't have a lot of experience with water softeners as I live and work in a city. Could be

 

[TomFOhio]

I believe that is the in and out for a water softener set up. That has to be tied together if you are not
putting in a softener.