I found additional info.
Yes, the switch was used to prolong the life of the points. It was used in trucks and cars from '41 to early '48. The switch was bolted to the top of the starter and was part of a unit that had a spring loaded connector lever. One end was connected to the stomp starter switch.
As I understand it the engine will operate fine with or without the switch, but if the year correct distributor (1110090) is used, it needs to be grounded.
