It splits the pickups to the inside coils. Those coils, in parallel, in that location has a very convincing passive Stingray tone. Plus, it's hum cancelling! Win win!
I had a Eureka moment once when discussing splitting T40 pickups with a tech here on this site. They typically split to the bridge side coil, and since they are all wired and wound the same, that has the hum since it's two similar coils. I applied ABY switch logic and came up with a plan to split one pickup as T40 pickups typically split and ground out the opposite coil on the other pickup. In theory, this applies RW/RP coils, so they should hum cancel. Drew this up, went down and rewired the bass and was happily surprised with the results!
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My drawing splits to the inside coils. Just apply the bridge PU wiring to the neck, and vice versa, if you want to split to the outside coils.
Fun fact: the phase switch on a T40 swaps the bridge pickup coils when in single coil mode.