It powers the LED, and for whatever reason is also hooked to the other side of the switch (NC).
So the signal is +5V while the switch is not depressed, +5V while it switches (through pull-up resistor, as it's not connected to anything as it switches), and Gnd when the switch is depressed.
So the signal is +5V while the switch is not depressed, +5V while it switches (through pull-up resistor, as it's not connected to anything as it switches), and Gnd when the switch is depressed.