Typically a battery switch has multiple options.
OFF- 1 - BOTH - 2.
Something like this.
They come in several colors and shapes. But are distinguishable by their function.
The design comes from an earlier time in boat building. There are concerns that this type of switch can risk damage to your alternator when the engine is running, should the switch be turned to off.
The cut-off switch could have the same issue. To prevent this the key that turns the switch is removable.
The purpose of a cut-off switch is to protect the user while they are working on the alternator from being exposed to a shock risk.
You need more information about the wiring and the connections to understand what the switch does on your boat.