Why does the wire from the selector switch enter the "Out" of the attenuator? Wouldn't the wiper be the normal "out"?
The Foreplay III is not wired as a normal attenuator. It's a shunt-more attenuator, and it's not a normal one of those either. This particular wiring sets it up so that a momentary failure of the switch contact removes the source; in a normal shunt mode connection such a failure acts as a momentary full-volume setting.
Actually, this is a variant of a classic "ladder" attenuator, which is (I'm sorry, it's not my fault!) NOT what is called a ladder attenuator today. You have to go back to the fifties to fine the classic ladder, which is a series of pi attenuators. It used to be the standard of quiet attenuators, used especially in live broadcast situations.
As you can see, there really are many attenuator wirings that are not "normal" but are still used in many situations.