I think you may have got some bad information. The toggle switch is a 3 position switch, in the middle position it is running in disc 1, which would be your normal hunting mode. If you push and hold the toggle switch forward you will be running in disc 2 as long as you hold the toggle forward, once you let go of the toggle will return to the middle position disc 1. If you pull and hold the toggle switch back you will be in a all metal pinpoint mode, no discrimination here. Again as long as you hold the toggle switch back you will be in the all metal pinpoint mode, when you let go it will return to the middle position the disc 1 mode.
Now as for losing depth, the 1266x will lose depth with higher disc settings. So for that reason a lot of people will run disc 1 kind of low and then a higher disc setting on disc number 2. Both disc 1 and disc 2 are the same and are considered silent search, but anybody that has run the 1266x knows the machine runs with a lot of noise.
Good luck,
Ron in WV