Refer to the Honda Cb500/550 shop manual, chapter 8, section 2 titled. STARTING MOTOR SAFETY UNIT.
This unit allows the starter button to operate when the trans is in neutral. The output routes to the starter button, in parallel with the clutch switch.
The starter solenoid will have 12v applied to one side of the activation coil whenever the key switch is turned on. The SMSU will only allow the ground reference needed for solenoid activation when the trans is in neutral.
If the only the clutch lever pulled in allows the starter to function, you either have it in a gear, the neutral sensor, or wire between it and the SMSU is faulty. Or, the SMSU has failed internally.
