Well, the lever on this switch is connected to the gear shift mechanism on the transmission.
It does two things:
1. It disconnects the power between the ignition key in "starter" position and starter switch solenoid (so that the starter will not turn) when gear selector is in 2, 3, 4 or R. It connects power from ignition key to starter solenoid when gear selector is in N or P - when it is safe to start the car.
2. It switches on back up lights when the gear selector is in R position.