I recently had the same problem with my key but found that one of the connections came loose. Glad I found that out because I drove 2 hours to ride the next week and forgot my key at home but with my new found knowledge all I did was unplug the connector and bypassed the key.
So if your quad is starting regardless of key position, that means you have a bad connection somewhere or a break in the wiring. It is a normally open circuit so if you leave the connections apart, it will start. If you splice them together, it will not start. That is what your key is doing in the ON/OFF positions