A thermostatic mixing valve isn't exactly the same thing as a tempering valve, but they're similar in function here.
Most water-borne pathogens that require 120F+ temps to kill have extremely low rates of reproduction at sub-70F water temps, so the fact that the mixing passes the "un-cooked" water is of little concern if it's from an otherwise clean & tested source. The sweet-spot range for rapid legionella bloom is between 85-115F.
The extra energy use to maintain water at 140F rather than 120F is only a standby loss issue, but it is indeed an substantial increase in that standby loss. With electric tank heaters that standby is very low compared to the energy for the raw heating of water up to temp, but in atmospheric-drafted gas burners it approaches half the total energy use at 50gallons/day usage (less of the fraction at higher volume use, more at low-volume use.) In the grand scheme of things it's not a very big loss, and insulating the hot water distribution lines as well as any near-tank plumbing (cold, hot, or temperature & pressure valve outflow) with 10' of the tank to R4 (5/8"-3/4" closed cell foam) pipe insulation would more than offset the increased loss of water stored at 140F rather than 120F.
Scaling is rarely an issue with tempering valves, but I suppose anything is possible hard water areas.
For most situations setting the storage temp to 120F has very low increased risk if the water source is a treated & monitored municipal supply. In many locations building code requires it to be initially set 130F or 140F when installed by a licensed plumber, but there is no requirement that the homeowner leave it there.





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