When the 3-position switch is in the upright/center position, nothing is connected to IN3. This means relay3 is never triggered and hence power is always and only applied to the B siding. Hence the center-position is referred to as the "B-only" setting.
When the 3-position switch is in the "A-only" setting (which is when the switch is flipped to the right side, then +12V is continuously applied to IN3. This triggers relay3 all the time. Hence the A siding is continuously powered.
When the 3-position switch is in the A/B setting (when switch is flipped to the left side), this connects IN3 and IN4 together. IN4 alternates high (+12V) and low (0V) and of course this is what causes the alternating action.
For troubleshooting, you should be able to flip between A-only and B-only and force relay3 to turn on and off. Get that confirmed first!
Oh, to be clear, must set the relay module to operate in the "HI" trigger mode which are those push-on jumpers on upper left side of relay board. Additionally, note that +12V DC from your wall-wart is tied to your outer-rail.
