Kill Switch schematic
The problem is that your Falstad simulator doesn't know that you're modelling a guitar pickup. You have used an ideal voltage source. When you short this out an infinite current will flow. You need some series resistance. See below.







simulate this circuit &ndash; Schematic created using CircuitLab

Figure 1. (a) Modified guitar mute and status indicator circuit. (b) Simple shorting mute switch. Note that pickup impedance needs to be added to work in simulation.


To mute the guitar you short the amplifier input to ground. Leaving it open-circuit will result in hum or buzz.
You could just use one pole of SW1 to short the pickup to ground as shown in Figure 1b. The pickup has a high internal resistance and won't suffer. This arrangement also has the advantage that you never leave the amplifier input floating during changeover. In fact many guitar pickup selector switches are "make before break" types for this reason. Note to avoid complaints from your simulator you would need to add the pickup series resistance after the sine generator. 100k might be a good value.


I've rearranged the LEDs just to avoid cross-over of wiring. Your original scheme was OK.