See here's the deal with those switches.. you'll see them on a lot of regs. The idea is when you inhale, you are pulling in a diaphragm that moves a lever against some spring pressure, and that opens the valve to deliver air. To keep the air flowing, you have to keep sucking on it... And how much effort it takes to inhale and exhale is basically known as the WOB (work of breathing).
Now to make it less effort for inhalation, they set up a venturi effect. When the air starts to flow, it does so in such a way that the air flowing out of the reg causes the diaphragm to stay depressed so the air flows without you really having to "tug" on it.
This is great, except if at the surface, if you put the reg into the water mouthpiece up - diaphragm down - it will start a massive free flow. The same thing will happen if you take it out of your mouth at depth with the mouthpiece up.
So they put in the little switch. It should not free flow if it is in your mouth... if it does, then the reg is adjusted a bit to easy - but if that is the case, you should be able to just back it off a bit with the adjustment knob (not the +/- switch, the turning knob).
So depending on what, where, when this happened, it is either normal - or goofed up. So maybe I've made it clear... or added nothing!
Larry
http://www.scubatoys.com