just activate the switch, try these
1) If it bypass the volume pot, you will know it, by turning the volume pot with the guitar plugged into amp and you strum any strings, there wont be any effect of the volume increase and decrease. Aka, you have no volume control, its full volume all the way
2) If if split pickup, then usually it will be a humbucker(you cant split single coil pickup). And if the switch do those coil spllitting thingy, with guitar plugged into amp and you play any strings, the volume is softer(coz you already split a humbucker) and thinner sounding(aka a single coil pickup now)
anyway, the above 2 just 2 of the many many possibilities of what a switch can do in geetar wiring circuit.
The only way to find out what it does(other then telling us what is the model of the guitar and if the direct switch is stock as you bought it first hand) is to find guitar tech open the thing up and trace out. Then you will know what exactly the switch is for
A switch is a switch, to enable on/off. But with the different way of wiring, you can do different type of "on and off". So in general, we dont know, wont know, what a direct switch is, from just the word "direct switch" without any background info.