Both of you got it right! Here’s how it works:
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If the motor is off and you engage the side stand, it won’t let you start the motor. You’ll see the side stand icon on your dashboard. If you fold back the side stand, the indicator on the dashboard goes off and you can turn on the motor.
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If the motor is on and you engage the side stand, it won’t cut off the motor. This is not a bug, but to prevent the motor from cutting off when riding in case the side stand is accidentally engaged when riding.