You should always consult the original LGB User Guide for these type questions.......you can find them at several Websites by the LGB locomotive's model number usually posted on the bottom of the locomotive, or on the original red LGB storage box. But generically, the 0 means all power is off to the locomotive; 1 is usually power to motor is off, but power is on to the headlight and smoke unit; 2 can sometimes mean the same as 1, but sometimes means all power on to motor, headlight and smoker; 4 is usually same as 3. But check the User Guide to confirm.
once at the site
in the menu, they have a list, by number, of all LGB locos.
find the loco.
a photo will come up from the old lgb catalogs, and, there, there will be a link to open the loco manuals
the manuals are in several languages , including english