At the frequencies the BL2 operates at, if you placed it say....smack in the middle of an open room, it would see, for simplicity's sake, a 4pi radiating environment. Equal energy behind the sub as well as in front of it. Since the subwoofer is right down against the floor, it will more or less be radiating into half-space (due to the floor bounce).
Now say you moved it against a wall. You would be increasing the effective efficiency of the subwoofer, because now, it would see a 2pi environment, where the energy from the back of the subwoofer is now reflected immediately back into the listening area, instead of dispersing itself some distance behind. Combine this with the floor bounce, and it is now radiating into quarter-space. Hence the need to cut output versus the freestanding position, to maintain (relatively) the same output as the freestanding position.
Move that subwoofer into the corner and you now are radiating into 1/8th space (for the passband of the sub, anyway), as the subwoofer is radiating into a 1pi environment in the horizontal plane, and combines with the floor bounce, so that you get a tremendous boost in output at frequencies whose wavelengths are longer than 1/8th of the distance between the respective boundaries (both walls and the floor). If you wanted to maintain the same output as the sub had at the freestanding position, you would again need to cut the output level - 18dB according to Sigfried Linkwitz.
You can see why corner loading is popular - it yields the most output with a given amount of gain. The problem is people generally crossover their subs at too high a frequency (or have to because of weak mains or an inappropriate crossover frequency in the sound processing equipment) and this leads to boominess and sloppiness in the sound due to all the undulation in the upper bass frequency response that result from corner placement. Unless you're running BL5's, which EQ's most of that out, I think. 
So, yes, that's mostly all the switch does on the BL2; it compensates for placement, cutting or boosting the output for a given placement situation.
For the full-range Beolab speakers, it is used, I would assume, to compensate for the baffle-step transition in response, which is a related thing, but a little bit different.
Jon