A mosfet switch for PWM signal
Forgive me if you already know this, but the configuration for your Nchan is a source follower, which is typically used as a current buffer.  More plainly, a circuit which will produce the same signal (minus VGS) on the source that is on the gate, but with more current, which limited by what the Nchan can supply (drain to source) and also limited by the capability of the power supply, which would normally be coupled to the drain.  In this case
you substituted a PWM signal for the power supply.

What you are doing is using an Nchan as a gate, to "gate" an on/off signal from a micro-controller to pass a PWM signal to a motor.

First of all, this circuit will work, however this depends on the input current requirement of the motor at the PWM input, and also, what kind of
Nchan you use.  There are basically two types of Nchan's, which are lower
power, and higher power.  I would suggest you NOT use a higher power Nchan
because the Vgs turn on voltage is usually in the neighborhood of 2VDC.
Using something like a 2N7000 would work (Vgs turn on = 0.7VDC), however it 
can only supply a maximum of 200mA from drain to source.  If the PWM input 
of your motor requires more than that, this approach will not work.

I would like to suggest you use a logic gate instead of an Nchan.
Specifically I suggest using an AND gate.  Put your PWM signal into one
input of the AND gate, and on/off signal from the mirco-controller to the
other input of the AND gate.  The motor's PWM signal is essentially a digital
input (1 or 0).  It's just the duration between the 1 and 0 change (duty 
cycle).

If you choose this approach, please be cautious about choosing an AND gate
that can supply a sufficient amount of current to the motor's PWM input.

Lastly, if you stick with using an Nchan, I would be cautious about swapping 
the PWM and on/off signals to the Nchan.  If you choose to do that, please 
make sure your micro-controller's output can supply enough current to the 
motor's PWM input.  Most micro-controllers (Arduino) supply very low output
currents.

Hope this helps.