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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