We'll set the HI/LO switch to LO and MIDS at 10. Doesn't matter where SWEEP is set. With MIDS at 10, C3 is connected to IC1-1. Under these conditions, the signal at IC2-3 is +7dB above the level at IC1-1 and shifted 180° at resonance. IC2.2 subtracts the signal at IC1-1 from the signal at IC2-3. Since those two signals are 180° out of phase, they are effectively added. The gain at IC2-7 is therefore 14dB at resonance.
Now let's look at the opposite case. Set MIDS to 0. Now C3 connects to IC2-7. At resonance, the signal at IC2-3 is 7dB greater than the signal at IC2-7, and it's 180° out of phase. Because we're feeding the + input of IC2.2 with a signal that's 180° out of phase, it's negative feedback. so now, instead of magnifying the signal by 14dB at resonance, we're reducing it by 14dB.
It's easiest to see what's going on if you either use a scope or simulate it.
