The switch (more like a button) on the barrel saves time to the autofocus system. But if the lens AF/M is switched to M (manual), then the Focus Distance Switch's position makes not difference, since one focuses the lens manually.
Lens set to AF (autofocus): lets say that you are taking photos of a subject that is moving around, but at a range of 20 feet to 100 feet. Since the subject is moving, you may want to set the camera to AI Servo and burst mode. In this case, you can switch the focusing distance switch to"0.48m/1.6 feet to infinity," since the subject won't be close to you. By doing so, the camera and lens save time keeping the subject in focus by not having to move the focusing mechanism all the way close to you and then back out.
Lets say that you are shooting a subject that's moving, but right close to the camera. In this case, the autofocusing system saves time focusing when the Focus Distance Switch is set to "0.31 m/1.0 ft. to infinity," since the system does not have to "hunt" back and forth all its length. It just has to focus within a close distance.
However, the Focus Distance Switch can be left alone in any position you want. Just keep in mind that sometimes a fraction of a second of focusing time could make a difference.
Some details about the EF 100mm f/2.8 Macro USM
-Construction: 8 groups, 12 elements
-Maximum aperture: f/32
-Minimum focus distance: 0.31 m/1.0 feet
-Maximum magnification: 1 x
-Filter diameter: 58mm
(for getting closer than one foot, use extension tubes).