I believe the S-1 switch puts the middle pickup "on" in positions it is not. So you get an extra two pickup combinations.

Though I have not played one, Mark Knopfler of the Dire Straits was rumoured to have this type of pickup combo very early in his days. I beleive he used a switch that would turn on all pickups at once. Listen to some of his very early stuff and see what you think.