Try not to get confused, these are both homing AND limit switches. In the homing sequence you are correct, each axis 'homes' itself and backs of by x, now x has no set value, all Mach3 does is monitor the pin 10 state until it sees the circuit made i,e, the axis has come off the switch. Now during normal operation Mach3 will see the 'homing' switches as limit switches and thus if actuated stops the machine in an out of range state and requires the operator to bring the machine out of that state by manually jogging the effected axis back in range, the same goes for the soft limits which are set up in Mach3 via a numeric value to allow full travel of each axis, this is set up by you when you set the homing limits etc as described in the dreaded manual.
I will try and have a quick look at the board but I have just finished a night shift and have to have a few hours kip before I go to my Mother in laws for new year.
You are getting there, don't forget to read and re read that dreaded manual copy and paste this into your browser (google chrome), page 14
ftp://machsupport.com/Docs/Mach3%20Setup%20Tutorial.pdfHeaven knows why that link doesn't work, but type in Mach3 tutorial pdf, look for smaller version, not the full blown one.