A couple of things to clear up about the portable ventless heater:
It does not have an O2 sensor, it just has a calibrated torch flame on the pilot burner that barely touches the thermocouple tip, if the oxygen content of the air gets too low the flame gets lazy, lifts up off of the tip, thermocouple cools, heater shuts down.
That is the Mr. Heater Big Buddy or Tough Buddy infrared plaque heater, it is 4000 (1 plaque low), 9000 (1 plaque high), or 18000 (both plaques high) BTUs per hour.
They are also using the wrong bulk tank hose, the big buddy has 2 regulators built in with threads to connect directly to 2 1LB propane cylinders, it also has a low pressure (11" WC) quick connect fitting. They are using a high pressure hose connected to one of those regulators, not the proper low pressure hose with a regulator at the tank. That hose is only for the regular Buddy heater that only has 1 plaque, and 1 cylinder connection, hence is 1/2 output. That hose also has to be used with an inline oil separator (sold as a filter) that has a male 1Lb fitting on one end and a female on the other. And yes the bulk tank is supposed to be located outside.
The 2 built-in regulators have valves in them that close when the 1Lb cylinder is removed to prevent gas from leaking, and the quick connect is designed like a hydraulic fitting, IE both male and female ends seal when disconnected.