Wire to computer from transaxle switch

The switch on the transaxle, that is basically a neutral safety and reverse light switch, also has a wire that goes to the computer. I'm guessing it tells the computer whether the car is in gear, or in park/neutral, maybe to lean out the TBI in park/neutral.
Does anyone know why it is there, and what will happen if the connection is bad?
Thanks.

Seems you answered your own question, the pcm needs to know what gear it is in for trans controls number one and to meet pcm programming parameters. In the future include the year and engine in your posts.

It's an '87 with a TH125C 3 speed.

My 95 Cutlass Supreme 3.1 L had a bad tranaxle position switch (all burned up inside) and the car wouldn't shift into 4th (Overdrive or whatever). RPM was always high and burned gas like crazy.
Replaced switch and all is good. Not sure if open/ shorted wiring would give same results.