The pickup selector switch is 4-positions. It's easy to get confused because there's only 3 clicks but you've got to count the first position.
The most counter-clockwise rotation is standby. Then comes neck pickup, both pickups, bridge pickup.
From the feedback I get, many people leave the pickup selector on both pickups most of the time and just click over to standby when they need a mute. More advanced users and stereo users often use the channels separately for effects and such.