If you visit the M Audio website it shows my configuration of amp into controller, then feeding the subs and tops. However for the M3 controller ( I know you will tell me to ditch it for a better crossover/limiter) it shows the have this switch set to passive (makes sense). However for the newer version M3+ it shows the same set up configuration but with this switch set to active and I can't understand why and what purpose it serves?

to switch on/off the internal crossover. Only for use if you are using an external xover/LMS between source and amps.
Jason