Reset Switch
What pushing the switch forward to "reset" does is it makes the powerhead turn back on if you got a jam in it. Remove the obstruction, press the switch forward to reset & voila, it turns back on.
That powerhead looks like it would have come from a Canadian Electrolux 2100, later in the run. First version was white, with just a red reset button, & the filter cover on the canister didn't have the hooks for the crevice & combo dusting/upholstery tool. That change, & changing the powerhead color to blue & adding the 3 way off/on/reset switch, & including the combo tool instead of 2 separate dusting & upholstery tools, are what differentiates this from a earlier Canadian 2100. The powerhead that came with your Ambassador would have been essentially the same as the PN6, with a slightly different hood cover. The other change they made to the PN6 was to the cover over the height adjustment wheels in the back, they added slots so axles could be used in place of the automatic height adjustment wheels. This was desirable for commercial users, & also for people that want fixed height adjustment so the powerhead grooms the carpet better.
Very nice job refurbishing your Ambassador! Very admirable you were able to fix the cord reel, instead of just buying a new one. My only suggestion would be, now that you have it fixed, is to buy the HEPA Cloth Style C bags available online & thru some vac shops. Most of the distributors in Canada, such as Hibbert & JohnnyVac, carry them now, so if a shop doesn't have them they can easily be ordered. They are a little pricey compared to the 4 ply paper Style C bag, but if you order them in bulk on Evacuumstore.com, they are reasonably priced there. Definitely worth it for the improved filtration.
Enjoy your free working Electrolux Ambassador!
Rob