I would favor the square hole, for releasing the terminal, where you can see the metal of the terminal. Try gently prying the terminal up, with a small, flat screwdriver. The round hole I suspect is intended to accept a label making the terminal number, but none were used.
I would also 'favour' that but, as I implied, would not be prepared to put money on that - and would certainly try the other hole if I didn't seem to be getting anywhere with the square one.
Rather than disturb the connections in the dinrail block i would simply join the new switch cables to the existing using a bit of choc block inside the terminal housing. I suggest this as if you are heavy handed it is possible to force the spring contact such that it doesnt then make a reliable connection when you put the new cables in ( and from the pic it looks like the cables have ferrules on, dod the new cables have them already?)
Rather than disturb the connections in the dinrail block i would simply join the new switch cables to the existing using a bit of choc block inside the terminal housing. I suggest this as if you are heavy handed it is possible to force the spring contact such that it doesnt then make a reliable connection when you put the new cables in ( and from the pic it looks like the cables have ferrules on, dod the new cables have them already?)
You reasoning makes some sense, but I would personally prefer to avoid 'unnecessary joints' whenever possible. In practice that means that I would undoubtedly first try (fairly 'gently') to release the conductors from the block before resorting to an alternative Plan B.
This type of connector is very common in industry. Just push a flat blade terminal screwdriver in the square hole below the wire you want to remove. It should release a spring that is putting constant pressure on the wire and you should be able to pull it out. You might have to lever the screwdriver either up or down if it doesn't release straight away. Don't be afraid of pushing it in too hard. I reckon the round hole is for inserting a multimeter probe for testing.
The coloured ends of the wires are ferrules that facilitate the insertion. It's OK not to use them with your new wire but twist the strands together tightly so that no strands are bent away from the rest when inserting.
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