I believe ( I may be wrong) that a switch machine can be placed on either the inside, or outside, of a points rails, if you place it in the middle of the spline point circle Trainz chooses either the R or L point rail, that is why I carefully zoom in, looking down from straight above, and place it where I want ... perhaps I am totally wrong, and this is an urban myth ? But I do the same thing with signals and all trackside assets. And I always flip the switch machine arrows direction to the intended normal path.