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Your drawing does not seem complete or even accurate. A magnet contactor, sometimes called a motor starter, is essentially a large electromechanical relay assembly. It has large contacts for the main current path to the load and has auxiliary contacts used for controlling the turning on and off and latching of the main relay coil. Many have integrated 'heater' that sense overcurrent draw by raising temperature from excess current being drawn and can open up main contacts, so acting also like a circuit breaker.
Here is a link that shows how they work and are wired for different applications:
Looks like half the coil is shorted out by the Aux switch. This will cause high curent to pull the contactor in. After the contactor is pulls in the Aux Switch opens removing the shorted portion of the coil. The current is now reduced to half of the pull in current, and is refered to as Holding current. To verify this measure the resistance of the coil with the contactor open , then manualy press the contactor armature down and observe the coil resistance it should increase.
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