I am thinking it might well be partly due to pump orientation. I am thinking that most people don't normally install a vertical in-line pump horizontally. If that was regular practice, then presumably, someone would have alrewady cornered the market on "horizontal in-line pumps". This sounds like a retrofit into crowded piping, confounded by an unconventional pump installation. I would be looking to see if there is vortex formation potential, gas entrainment or other things that might be giving rise to some vapour fraction in the pump volute, and the volute, due to its orientation, is having difficulty expelling the bubbles whereas it otherwise wouldn't.
To me, the reduction in performance is not so "horriffic" that it can't be explained, at least in part, by poor overall pump installation and orientation. It's a small pump; it probably wouldn't take much to make it work poorly.
But...that's just me...and I'm not a pump guy.
Regards,
SNORGY.