I actually love this keyless dial. I read the manual, but also watched a video on it and was able to tell the dealer a thing or two when I picked up my bike.
Overview of the positions around the switch...
At the bottom is the switch ON and electrical seat release button. It is the seat release button only after the switch is turned ON.
Straight up is the the CENTER ON position.
Left of this is the LEFT OFF, the only true OFF position.
Farther left if the knob is pressed in and turned is the handlebar lock and mechanical seat release position.
Going to the right of the CENTER ON is the RIGHT OFF position and farther right is the gas fill cover release.
When the bike is turned off and the knob spins freely the switch is not locked in or meshed with the knob (why it turns free). That's the secure way to turn off the AK 550.
The only thing the fob does for you is to allow you to turn on the keyless switch. IF the bike is actually turned off then the knob will spin free and you won't be able to turn on the bike without the fob being near to turn on the switch.
The OFF position on the left is the true off. Only with this position do you actually need the fob to turn the switch on. That's what is happening when the fob is near and you press the silver bottom button and the ring around the switch lights up blue. At this point when you line up the knob with the LEFT OFF position you can feel the switch engage with the knob. When the knob is in this position there is a timeout of about 10(?) seconds and if not moved it will turn red and shut down disconnecting the switch from the knob.
While the ring is lit up blue if you turn the knob to the CENTER ON position the bike will turn on as shown by the dash lighting up. At this point you can start the engine and also open the seat by again pressing the silver bottom button. This is the same as if you had an actual key and turned the ignition switch to ON.
If you turn the knob to the RIGHT OFF position the engine will be shut off and the dash will go dark BUT the bike is STILL actually ON. This is why the battery will drain a bit faster than other bikes... 'cuz it's still turned on. The RIGHT OFF position should only be used when you stop for gas or stop for a really short time to take a picture or whatever. AT this point anyone can come along without the fob being anywhere near and turn the bike back on by turning the knob back to the center ON and start your AK and ride off. Turing the knob to the RIGHT OFF position and then a little more to the right will open the gas fill cover. While the knob is turned to the RIGHT OFF position you can also press the silver bottom button to open the seat as well.
When you want to turn off the bike completely then turn the knob to the LEFT OFF position and either wait for the red ring to timeout or press the silver bottom button to turn it all off. The knob will then spin free and no one can turn it back on without the fob.
If you want to lock the handlebars turn the handlebars to the left as far as they go, then if the knob is turned to the LEFT OFF position, then right away press the knob in and turn further to the right to the LOCK position. If you need to open the seat also then before the red ring times out turn the knob a little more to the left and this is a mechanical (cable operated) seat latch release. When you have locked the bars and after the timeout of the red lighted ring the knob now will spin free and you cannot unlock the bars or open the seat until you press the silver bottom button to turn the switch on again.
To unlock the bars turn the switch on again, with the fob nearby, and the ring will light up blue. Then turn the knob to the LOCK position and press it in and turn to the LEFT OFF position and if desired to the CENTER ON position.
I hope this is helpful and not more confusing. After writing it I can see it being still confusing. But I think understanding what the positions mean around the dial will make it easier to use. I have no confusion about it at all now. That switch really has no more functions than my Burgman 650 keyed ignition switch other than the gas door part.