'Dump' in this instance infers dumping/disconnecting the drive, same as the button does, to facilitate a gear change .... it basically disconnects (as you thought) the power to the shuttle solenoids which engage the fwd/rev drive, so is effectively emulating the neutral position on the column selector switch ... a Thwaites has a small pedal where you'd expect to find the clutch, as you find in JakieB's 3CX (least it was in my '87 site-master) ... yours obviously has it on the stick (3CX also had a 'dump' / disconnect button on the front end control lever to disconnect drive, if required when loading/emptying/closing the front bucket)