On mine (Toplight Line), it's an actual "off" switch. The capacitor charge doesn't get dumped, and the light comes on again as soon as you move the bike sufficiently (about 1/4 wheel rev, unless moved slowly).
I did once have a 4d-Lite+ that had contacts on the outside that you could short with a key to dump the capacitor charge. Memory say that was less of an instant off.