That switch grounds the ignition coil primary circuit when depressed and kills the engine, so you made a very good diagnostic test depressing the switch. Do it again with an ohm or continuity meter on the disconnected switch leads just to be sure it's opening in the free state - infinite ohms or zero continuity, full continuity when depressed/closed.
If the switch is good, remove the harness leads and jump them together while the engine is idling. It should die immediately. If it does, I suspect corroded or dirty connectors on the harness since your new switch should be spotless. If the engine didn't kill, that harness circuit has an open or bad connection somewhere. Trace the black ground end to it's connector. I think it's a common connection at the flywheel hsg. right/starboard. The white/green wire goes to a terminal on the side of the distributor.
If all the above checks out the engine should kill after your have reconnected the switch and depress it. If it kills by depressing the switch, but not when shifting you probably need to tweak the switch's position against the Y plate.