A couple of thoughts. How is the heater connected? Series or parallel? If parallel, then all the water does not go through the heater. Look for "tees" to determine your hookup. Even if series and all the water does go through the heater, you should be fine. My Yanmar 3GM30F which has similar power to your M25 has all 5/8 inch hoses. Don't forget hose size is based on ID not OD.
I also have a 3GM30F and an Isotemp water heater with 5/8" hoses. I've had it for maybe 15 years and haven't had any issues.