Beau,
Yes you're correct, that diagram does leverage the 2nd pole of the 5 way switch to yield some coilsplit positions. But it has a couple weird tradeoffs.
The two coilsplits that it yields, I'm not sure most people want them. i.e., this one yields Neck slug coil (inner) coil in parallel with Bridge screw coil (outer) in Position 4 and Bridge screw coil (inner) in Position 5. E.g. it doesn't yield Neck screw (outer) nor Bridge slug (inner).
Additionally, this diagram also has the tradeoff that the other traditonal pickup combinations are moved around to different positions on the switch.
I.e.
1. Bridge HB only (this stays the same as normal)
2. Bridge HB / Neck HB
3. Neck HB
4. Neck slug / Bridge screw
5. Bridge screw
Finally, the tone pot in this diagram is wired wrong. This diagram is listed in the thread about diagrams that have errors.
I've worked up an alternate version that gives this..
1. Neck HB
2. Bridge HB / Neck HB
3. Bridge HB
4. Bridge screw / Neck slug
5. Neck slug