Dual-continuum models have been widely used in modeling flow and transport in fractured porous rocks. Among many other applications, dual-continuum approaches were used in predictive models of the thermal–hydrological conditions near emplacement tunnels (drifts) at Yucca Mountain, NV, the proposed site for a radioactive waste repository in the USA. In unsaturated formations such as those at Yucca Mountain, the magnitude of mass and heat exchange between the two continua—fracture network and rock matrix—depends on the small-scale flow characteristics in the fractures, because channelized finger-type flow strongly reduces the interface area between the matrix surfaces and the flowing liquid. This effect may have important implications, for example, during the time period that the fractured rock near the repository drifts would be heated above the boiling point of water. Depending on the magnitude of heat transfer from the matrix, water percolating down the fractures will either boil off in the rock region above drifts or may penetrate all the way to the drift walls and possibly seep into the open cavities. In this study, we conducted a sensitivity analysis using different approaches to treat fracture–matrix interaction in a three-dimensional dual-continuum setting. Our simulation example was a laboratory heater experiment described in the literature that provides evidence of rapid water flow in fractures, leading to seepage into the heater hole despite above-boiling conditions in the adjacent fractured rock. We showed that the experimental finding can only be reproduced when the interface area for heat transfer between the matrix and fracture continua is reduced to account for flow channeling. Our analysis also suggests that the conditions in the laboratory experiment are unique and not representative of the expected thermal–hydrological conditions near emplacement drifts at Yucca Mountain.