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The two ground wires from the points require an insulating washer between them. I believe the insulating washers are made of bakelite, but nylon washers work well as a substitute. As Buccaneer mentioned, the idea behind the kill switch is to short the points to each other.
The entire kill switch assembly is insulated from ground until contact is made by the thin springy 90-degree contact with bell shaped contact washer at the bottom of the stop switch.
In 1958 OMC started using a “push to stop” kill switch for the larger horsepower motors. This was a different kind of switch, but it worked in a similar fashion by keeping the two wires insulated until the button was pressed, shorting one set of points to the other.
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