The european parking light option occurred to me as well, but in that case the ignition and gauge lights wouldn't come on, would they? That would let anyone walk up, start the bike, and ride off. Now, if that switch position turned on the turn signals as running lights, it would be useful for leaving the bike at night. As for rewiring the switch, very possible. We never know what a PO was up to...
I have a headlight relay installed so the headlight is run directly from the battery, which I recommend for our bikes, as the headlight is always getting getting full voltage. I suppose a switch could be put in line with the relay to give control to lighting if desired. I always ride with my light on, but start up with it off.
Steve