The starter should spin whether or not the side terminal is connected. With the wire to the coil + disconnected, there should be NO voltage on the side terminal unless the foot pedal is depressed. Then it should have battery voltage. It sounds like you got a bum switch, something that's not uncommon, given where they're probably being made these days! It's also possible to displace the components of a good switch by putting too much torque on the big stud nut while attaching the battery cable.
Jerry

"It is better to be silent and be thought a fool than to speak and eliminate all doubt!" - Abraham Lincoln
Cringe and wail in fear, Eloi- - - - -we Morlocks are on the hunt!
There is nothing noble in being superior to your fellow man; true nobility is being superior to your former self. - Ernest Hemingway
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