The terminal strips usually have one lug with a right angle which can be soldered to the top of the pot or whatever. That lug then automatically becomes a ground lug. The others are just connection points for whatever other wires are knocking about.
The diagram isn’t the most clear thing I’ve ever seen. I’m not sure the wires labelled ‘top-term’ and ‘bottom-term’ are referring to what they’re supposed to (that or I’m missing something). I think I’d try to redraw a little more clearly before kicking off if I was working on this.
It looks to me like the coil tap splits the coil in two of its three positions (including the illustrated middle position) and I think the other switch is doing two things. Flipped to the right, I think it’s cutting the neck and bridge signals in order to solo the middle pickup. In the middle should be normal and over left the middle pickup gets phase flipped (although I haven’t been masochistic enough to parse out all the switch wiring to confirm that’s absolutely correct). Yet. Hopefully, I won’t need to but let me know if you need a hand.