There should no current connected to a magneto. A magneto generates all of its own power as it is turning. Running power to a magneto creates a short and will result in an immediate fire.
Since magnetos generate their own electricity, the ground lug on a mag provides a path for the electricity to flow to ground instead of through the coil, plugs, etc. when you want to stop the engine from running.
That mag terminal on your switch should go to ground so it should never show any voltage.
I'm not fully down with the "magneto circuit" in your picture indicating a ground opposite the switch unless they intended to illustrate the internal ground within the magneto.
Bottom line, that is not the right switch for any non-magneto ignition, however you could use it to energize a relay that powers your electric ignition.
