.A solar system will typically be putting out 10-30 amps to the battery bank.  An alternator will typically be putting out 45 - 200 amps to the battery bank. So you want everything you can get from the alternator when the engine is running.  Sometimes, on some boats, the alternator will sense the net voltage of the battery bank plus the voltage from the solar controller and see a higher voltage than the actual voltage of the battery bank.  This may cause the alternator to prematurely go into the float charge phase which is low amps.  Thus, the batteries are not getting the full charge from the alternator.  When this happens, you use the switch between the solar array and the controller to turn off the solar so you get full power from the alternator. 

How do you know if the alternator is going into float mode prematurely?  You see it on the amp meter or the battery monitor if the boat has one.  Otherwise it is difficult to tell.  This is the only reason to shut off solar with the switch.  The switch is between the solar panel and the controller because the controller is powered by the battery, not the solar panels and you want to keep power to the controller rather than reboot it all the time. 

There is no harm in having solar, generator, shore power or alternator connected at the same time.  Another consideration: If the batteries are low, it is unlikely the net of the battery voltage and the solar is enough to move the alternator to float mode.  This only happens when the batteries are nearing full charge and it is midday and the solar is putting out a full charge.  It happens on our boat only under these conditions.  Then there is the difference in charging voltage of lead acid and LiFePO4 batteries.  It would seem more likely to happen with LiFePO4 batteries since the charge curves are at a higher voltage.