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Your engine is going into a "safe" mode. The engine is cutting the rpms to avoid damage. From what you posted either the water pump is faulty, bad impeller or the thermostat is not opening properly.
I highly recommend not trying to run the engine until it is repaired.
The water pump impeller should be replaced about every two years, the thermostat every five depending on use.
If the water flow from the water indicator then I'd look at the thermostats.
You can use a non contact IR thermometer to check the temperature while running.
Let me know if you have any additional questions on this.