This is a 3 brush generating system. The generator puts out an unregulated voltage depending on the speed of the generator and the setting of the third brush. When the generator speeds up and puts out more than battery voltage the "cut out" closes and charges the battery. (I think the cut out should operate at 6.7 to 6.8 volts). When the generator slows down and produces less than battery voltage the "cut out" opens to prevent battery discharge thru the generator.
The cut out has nothing to do with the ignition curcuit even though the coil may be mounted on the generator.
CAUTION: When you get the engine to running, make sure the charging system is working properly because a disconected generator will work towards a meltdown if there is no load (battery) in the circuit.
,,,,,BEEN THERE---DONE THAT!