Soooooo I did a final setup of my Bladerunner and the 'quack' sound is gone! I think what was happening is that the bridge saddles were rattling against eachother in a way that the pickup was amplifying it and made it sound terrible on clean amp settings. The Kahler has saddle spacing adjustment screws (ridiculous IMO, but it was meant to be a universal accessory for any brand and neck spacing differed so I get it) and i was able to separate them all and eliminate the buzz. What a weird contraption that is a real pain in the ass to setup, plus the intonation and adjustments screws are under each string
. Ive set Kahler's up before but i forgot how finicky they are. Anyways, problem solved.
I also lowered the pickup to reduce the output levels to my AC30 which helped a bit, but ultimately yes this guitar is meant for high-gain amp settings. Now that i can hear the pickup clearly with the buzz sound gone, the switch is a 'coil tap' or capacitor rolloff with the effect of a coil tap. The 'tone' knob is described as a 'fat control' which as GAD said is more like a shaping knob that boosts the mid-range as it is turned up. You could look at it more like a lead sound in whichever pickup mode you switch it to. For instance -
Switch down / Shape knob down - thinner single coil 'strat' rhythm sound
Switch down / Shape knob up - mid-range boost for singe coil lead or similar PAF humbucker sound
Switch up / Shape knob down - PAF SG-like rhythm sound
Switch up / Shape knob up - Hot EMG lead sound with mid-range boost - really great sustain and overtones above the 12th fret
I get it now! If there is ever a gig where this guitar applies itself appropriately ill bring it out, but with all the fragile body angles and specific pickup application i can see why these mostly remain indoors. They looks soooooo badass though, and the body weight and comfortability of the neck is incredible, like a lighter Gibson Explorer. Way to go Guild! Definitely not reissue worthy but a cool piece of rock-n-roll history.