I have two basses where I can approximate this by cutting out one of the coils. I use it quite a lot on my ASAT bass, which also has a Tele body. It has a fuller tone...all the lows, but more high end, but lower output than the humbucker in series.
As to the switch...you've got it so you might as well put it in. You may never use it but what the heck.
I think the original circuit had the three settings as (1) Volume-no-tone, (2) Volume and Tone and 3 Volume and fixed tone (tone pot out, capacitor in).
I think the first setting is pretty much exactly like position 2 with the tone pot turned all the way up (some people claim is has more highs, but I don't see how). Position three would give you just one tone setting--always on.
I would probably be inclined to do this circuit instead:
Positions 2 and 3 would be the same as the "standard" circuit, but position 1 would take both the volume and tone out of the circuit. That would make it like a no-load pot wide open, which should give you some additional highs.
I think there are other things you could do as well. For example, I think you could set it up so that V and T are always on, and setting 2 and 3 add caps sort of like a simple varitone.
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