I just put a selector valve like that one on my tractor. My tractor has a plate on it's 3-point lift valve that has two ports on it. I used to have to connect a jumper-hose between the 2 for the 3-point lift to work. I had added two QC's to those two ports for rear hydraulics and without the jumper hose, the tractor hydraulics would be dead-headed at the QC's check valves, causing the pump to go over the relief valve bogging the engine, also the lift didn't work. The jumper-hose solved that, by getting the oil back into the tractor valve, thus allowing the lift to work and unloading the pump as in an open-center arrangment. I added a selector valve just like yours and a T in the return line. P goes to P on the selector valve, and port A goes to the rear hydraulics P QC. Port B goes back to tractor Tank thru the Tee fitting I added. The Tank QC (rear-hydraulics) also goes to to Tee fitting. Now I push the knob one way when nothing is hooked to the rear QC's and the 3-point works normally. Pushing it the other way, the rear QC's are active. I have open-center things that run from the rear QC's, so being open-center, the 3-point lift also works as long as something open-center is connected. If nothing is connected, I must push the selector valve the other way.
Botton line on your problem, it sounds like you don't have a return to tractor-tank from the hoe in the one position that loads the tractor hydraulics down? Without seeing how all the hoe connections are done, I don't understand how some things on it work at all ?(and some don't)