Yes it is there for a good reason. It's there for people who don't know about this stuff. I never, at any time, said that the switch should be turned through the off position?!? That's really dumb. Off is Off.
If you read my last post properly you'll find that I said: the only time I've ever blown diodes is when SWMBO has turned the switch from One past Off to get to Two.
Try turning the switch from 1 to 2 through the Both position. You'll get a pleasant surprise. Your alternator will carry on charging and by a miracle, the diodes will be safe!!!