No doubt about it, Marx made some very, very cool stuff. They were selling trains and accessories for something like one tenth of what the big guys were asking, so they had to really develop the ingenuity.... as a result the Marx accessories have a lot of character.
I think the whole clear-bulb 5-light position-light thing was just too much to try to explain to non-train-buffs. Prototypical, yes, but Marx was all about toys, and colored lights just looked better and were easier for the kids to make sense out of. Read the copy on that page I posted: the top one, with the two light red-and-green, makes sense. The bottom attempt at explaining the position light... huh?....LOL
I believe these 1404's came from Marx fitted with two red, two green, and one center amber mushroom bulb. That way the center amber could be lit with either the red or green and still make some kind of sense. The alternative is to retrofit them with all clear like the Lionel signal bridges and be more prototypical.