I couldn't even figure out what you're trying to achieve with that. Flip that switch either way, your PSU goes bang. Maybe it won't go bang if you just plug it in with the switch in the middle, and your rheo set to max resistance, at least not immediately, but your rheo windings might start glowing a bit with current from the +5 to the +12V (you'll be putting 7v across it) and when you turn the rheo low it will go bang.
Hmmm after some pondering, I think you were trying to acheive a rheostated switchable 7-12V mod. Now, there's not a lot of point in having the switch to 7V unless you want more adjustment range, or you want to run more fans/Amps than the rheo will dissipate power for connected to 12v when adjusted to 7V.
I think you're wanting to wire it like this.....