two speed switch on Pentair does nothing

Hi again,

I opened up my pump today and I'm a bit confused on about the connection. The switch was definitely not connected because the black wire from the switch is loose. It looks like the green ground is going through terminal 1 and also to a ground green screw. Black wire is going to terminal 2. Red wire is going to Terminal 3. Currently it seems like power is running through terminal 2 and 3, is it possible to run this way?

To me it seems like the red wire should go to terminal 1, black should go to the loose switch black and the green should only connect to the green screw. Am I incorrect? Thanks
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That wiring does not make any sense at all ... You must have power to Terminal 1 and then whether you have the other LINE to 2 or 3 determines the speed. If terminal 1 is also grounded, I have no idea how things are working or if it is even safe????
 
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