Why do you have a separate kill device on your aircraft? And how does it know that your receiver lost signal if the failsafe is set to lower the throttle? Wouldn't that be a command from the receiver? How does the kill switch know that the receiver lost signal? I'm not trying to be a smart @$$ just trying to use some logic on your set-up.
Why is simple, its a way to kill the engine immediately from the transmitter without depending on a servo.
It senses the pulse on the channel, if the pulse is one way the switch is armed, if its the other way it kills the ignition. Loss of signal would send that channel pulse thats set by your fail safe (or bound position if spektrum) which if you have any sense, is engine killed.
If the switch looses signal completely it defaults to kill engine.