It won't import switches. What it does is place a selected track spline, actually any spline you want to assign, where you've drawn your route line.
After importing the TransDEM route, you'll see your chosen tracks in place in including switches if you drew your route so that lines formed a switch.
You can also import Google Earth .kml route data that will then be placed exactly where it should be in the world. The .kml files become the blue route lines as if you had drawn them yourself. There is a website, sorry I'm not at my Trainzing computer to look at my favorites, that contains some .kml files for some rail routes.
