Bob,
That switch is supposed to do both when it is working properly.
It opens the connection between the two big screw(terminals) when the switch is rotated to the off position. Also when the switch is in the off position, it connects the small terminal for the white/brown wire to the one big screw(terminal) where the ground braid attaches that goes to the frame ground screw in the boot. This is an early form of theft protection. The points are grounded and won't work plus the battery is disconnected so the starter will not work. The battery is disconnected ( nothing attached to ground ) when the switch is in the off position. If you still have electricity when the switch is in the off position, then either the switch is bad or something is wired wrong to the ground side of your battery.
Ed