I have a TS1910 with what sounds like the same mis-labelling. For the first winter I used the snowblower with the PTO in the #1 (down and out) position as I read on TBN that this was the 540 rpm position. The following summer, with the Iseki tiller in place, I wanted to see what some of the other speeds were like on the PTO and was surprised to see that the #3 PTO speed (lever down and in) was slower than the #1. I read on TBN that most North American PTO instruments are not made to handle PTO speeds greater than 540 and I have not heard that the Isekis were made with a speed lower than 540.
The following winter I used the # 3 PTO speed for the blower and the snow didn't seem to blow as far but it still did the job.
There is a fancy instrument that can be used to check rotation speeds (name escapes me) but for now, as long as it tills or blows in the slowest PTO speed, I will use #3.
Cheers!