Unfortunately I still have more questions after reading the schematic.
SW4 (BAGEL) allows current flow through R9/LED3 (BAGEL) which raises Vbe on Q2, forward biasing it, allowing current flow through Q2, dropping Vcs.
Meanwhile, power has been flowing through the main switch, with RL3/RL4 making a voltage divider. That main power flows to D1, forward biasing it, and then hits the cathode of D4, reverse biasing it, and allows Relay 1 to hold main power closed. The cathode of D4 also tees off to inputs on Relay 2, and the cathode of D5 (whose anode is fed by both another input on Relay 2, and the source of Q2).
So, when Q2’s Vcs drops due to it turning on, D5 presumably reverse biases, so the only input felt on Relay 2-2 is from D1. And Relay 2 does… something. If anyone else can explain, I’d be grateful.