hey all, new the board, please help me if you can

i'm a jack of all trades master of none kinda guy, i've installed a Bosch Aquastar 125 in my house. We have a small house, only one bathroom. The unit seems to be working great. The kitchen sink, bathroom sink, washing machine and bathtub all get really hot. The problem is when I pull up the show diverter on the bathtub spicket. As soon as I pull it up I can visibly see the flame go down on my tankless unit and the end result is a luke warm shower. I can get it flame up and produce hot water again if I turn on the bathroom sink while the shower is running. Also don't if it's related, but if i have the hot water on in the bathroom sink on and my wife turns on the hot water in the kitchen sink there is significant pressure loss.

i've been reading about thermostatic shower valves vs pressure balance valves.

please help, haven't had a decent shower in a while!!!