They open and close the ground side of the overdrive and lockup based on trans pressure but the trans normally needs power through the vac switch. If wired correctly, the vacuum switch would not allow OD or lockup unless there is enough manifold vacuum to keep the vac switch closed (3 inches). The connections to the vac switch look correct but there should not be continuity between the connections (or test light power on both connections with the key on) without 3-7 inches or more vacuum applied to the port. The vac switch and attached micro switch may just need to be cleaned to get them working. The microswitch button is probably stuck and not designed to be exposed to the elements.
The carb linkage kick down is an independent system and will kick down to second gear but leave OD and lock up engaged without the vac switch working.