Used on early Fenders the switch effectively acts as a rolled off tone pot. Can uses a variety of switches to get multiple capacitors on one switch.
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The Jazz switch was used on early Fender guitars which was then discontinued with the addition of the P Bass to the Fender Range. It utilises a capacitor to a switch to act like a tone pot completely rolled off in an instant. It can be incorporated into a Push/Pull Pot or a two way switch (adding one capacitor) or a three way switch (adding two capacitors) to give multiple tonal variations with different tonal results. I have found this very useful in recording to add texture without having to change the instrument you are using and can have a similar effect whilst playing live or casually to add greater variation. There is also possibility to add this alongside a tone circuit to utilise an even darker tone with the tone pot rolled off as well as the capacitor from the switch engaged.