[f5fstop]

Actually, the owner's manual does state basically what the dealer said. "If a person of adult-size is sitting in the right front passenger's seat, but the off indicator is lit, it could be because that person is not sitting properly in the seat. If this happens, turn the vehicle off and ask the person to place the seatback in the fully upright position, then sit upright in the seat, centered on the seat cushion, with the person's legs comfortably extended. Restart the vehicle and have the person remain in this position for about two minutes. This will allow the system to detect that person and then enable the passenger's airbag."
As for the switch, there is no requirement for a switch for this type of system, unless the vehicle only has two seats. GM, as well as most other manufacturers are tired of getting sued because some idiot did not turn the switch on or off as required. So, most are going to this type of system.
I would still go to the dealer and make sure it is working properly. The PPS (Passenger Presence Sensor) could be a problem as well as the seat belt tension sensor that is used to sense a car seat. When installing a car seat, the belt is pulled extremely tight and the sensor informs the SDM that a car seat is installed, so turn off the bag.
As for seat position, the PPS (Passenger Presence Sensor) senses the weight of the occupant, while the SPS (Seat Position Sensor) senses seat position.
If a person over the required weight pulls the seat forward past the sensor, the system does not turn off the passenger air bag, it will limit the deployment to a stage 1 deployment.
The air bags in the H3 have two stages, where stage 2 is for a very serious accident. So stage 1 is not that forceful of a bag deployment (saves the nose).