It was a dot because both the switches were open, so no current was flowing. The circuit was essentially incomplete.
They wanted you to talk about it with reference to the lowest dot. As they said at the start of the question the switches were open.
Also it was a neutral Kaon (Remember it was a Positive Kaon --> Positive Pion and X) - you had a strange particles on one side, therefore instantly one should be thinking of conservation of strangeness. Also with a neutral Kaon the charge, baryon number and lepton number were all also conserved.
Hope that helps