Hi Elaine
It’s hard to say anything for sure from a photo as it’s hard to trace wires around under others. Things are too tight packed here to be sure but I think you’re correct in identifying the pots. One certainly looks like volume and the other certainly looks like tone. It’s safe to assume the one with the PCB attached is distortion or gain.
I think that orange wire goes from the volume to the common lug of the switch and then, from one of the corresponding switched lugs, there’s a white wire that seems to go to the tone pot. This does suggest that in one position the tone is bypassed but I can’t be 100% certain. Should be possible to check with some listening tests though.
As to the other toggle switch positions, your own testing is the best thing here. Once those wires get to the PCB, it’s a lot more difficult to trace out what they’re doing.
On the subject of listening tests, it might be worth doing the ‘clunk’ test and tapping a screwdriver against the pickup poles to verify the 4-way pickup switch positions. I have a suspicion that the position 1 (neck loud) you mention could be a series pickup connection. That’d bring in the neck and bridge pickups in series and would give a slightly beefier output. This sort of 4-way switching (neck+bridge series/neck/neck+bridge parallel/bridge) is sometimes seen on Teles.
If you tap the screwdriver off a pole on each pickup as you move switch positions you should be able to confirm which is active in each position.
Hope this helps a bit.