01,
It will work, but you will just have to move more valves than normal..
In the Spa mode, you want ALL the suction water coming from the Spa drain. And you want ALL the water to go back to the Spa.
In the Pool mode, you want NONE your suction water coming from the Spa Drain.. And you want most of your water going back to the pool, except just a little going to the Spa.. This will cause the Spa to spillover into the pool.
I can't tell if you have a spa make-up valve or not... Just to the right of the "Pool Return" label, is a valve that is shut off.. What happens when you turn that valve on? Do you know what that valve controls??? It think it may send water back to your spa, when in the pool mode.. causing the spillover..
Thanks,
Jim R.