Tankless hot water heater with shower valve

I am considering two upgrades. The first is to replace the three handle shower system (hot, cold, and diverter) with a Symmons Temptrol single handle valve with integral diverter lever. It is of the pressure balancing type which is designed to keep the water temp constant if someone turns on another hot or cold water. The second is to replace the hot water tank with a Takagi tankless demand hot water heater. Will these two things work properly together? When someone, for instance, turns on cold water, the shower valve will cut back on the hot water to keep the temp constant, albeit at slightly reduced flow. Will the reduced hot water flow in the heater just cause the hot water to get hotter?
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