As has been explained, that switch just powers the starter relay (solenoid). But the relay coil inductive load does cause a tiny spark at the switch contacts on release, and that eats away at the contact.
The switch is likely unserviceable by now. The plastic parts turn to fragile brittle crap after some decades. So if it works, I would avoid touching it.
It switches +12V to the headlight when not starting, disconnecting the headlight and connecting the starter relay when pushed. Only reason I can think of is to reduce battery load when starting.
The headlight current tends to overheat the switch (again, decades passing has corroded the contacts causing some resistance). I recommend bypassing that switch for the headlight circuit, it's quite easy at the junction where the pod wires connect to the main harness. Doesn't affect starting in my experience. But the kickstarter still works...