It does both. If the water doesn't stay in the radiator long enough, the engine will overheat. The thermostat acts as a flow restrictor, even when it is open. My 51 F-2 drove me nuts trying to figure out over heating. I found out that flatheads MUST have the proper radiator shroud, even if it makes it a bugger to change fan belts and water pumps. I did all that and still had problems. Finally figured out that it was originally a six cylinder truck and someone stuck a V-8 in it. When they made the switch, they modified the radiator from a two port for the six to a four holer for the flatty. Only thing they missed was that the six radiator has three rows of tubes and the V-8 has four. BIG DIFFERENCE. Once I got a V-8 radiator, all was well. Oh yeah, don't leave out the thermostat and check the timing, a retarded ignition will cause overheating.