The signal indications have a speed or speeds associated with them and a location where the speeds apply.
There are 4 speeds in the B&O signal system:
Track speed : whatever the speed is normally on the track (determined by the physical characteristics of the track).
Medium Speed: Not exceeding 30 mph
Slow Speed: Not exceeding 15 mph.
Restricted Speed: Prepared to stop short of train, obstruction,switch not properly lined or broken rail
There are two general location descriptions, the speed approaching the next signal and the speed the train should pass the signal or next signal and/or switches.
The indications are a combination of a speed or speeds and a location or locations the speeds apply. They don’t tell the engineer where he’s going, they just tell him how fast he should travel and where.
So the signal system tells the engineer what speed to proceed at or when to stop. The dispatcher doesn’t pick which signal to display. FRom the dispatcher’s perspective, the switches have only two positions, normal and reverse, and the signals have only two states, cleared or not cleared. In CTC or at an interlocking, once he lines a signal the signal system itself, the relays in the cabinet, determine what exact indication the train recieves, based on the positions of the switches and which route has been lined/signals have been requested. In Automatic Block Signal territory, the indications are totally driven by the positions of the switches and the occupancy of the track, the dispatcher has no say in what signal is displayed.
An Absolute signal is defined in the B&O rules as: A fixed interlocking or automatic block signal without a number board, the most restrictive indication of which is “Stop”. Contrary to your assumption, the lack of a marker light or a lit marker light makes the signal absolute, not that there is one on top.
By the way the B&O rules refer to themain colored pair of lights as a “cluster” an