... I can't wrap my head around what difference will be made by putting the 1M between the tabs (doesn't that accomplish the same result as whats pictured, just in a simpler fashion?) ...
Yes, it should be exactly like what's in the drawing.
Here's the problem: your implementation of the drawing isn't working, and all I can tell from your picture is that the 1MΩ is not across the switch contacts. So, since both approaches are supposed to do the exact same thing, there is some wiring error in the your
implementation.
My recommended wiring makes it very hard to make a mistake that's not visually-obvious. So if you do it that way and it doesn't work, you should be able to see pretty quickly why it didn't work.
I'd bet that in the Hiwatt, the 1MΩ resistor is right on the inside of the XLR jack, bridging pins 2 and 3. The pedal's cable just has a wire to each of those (with or without using an actual 2 conductor plus shield cable), and at the pedal those two wires go to either contact on a SPST footswitch.
Anyway, the lesson is tricky wiring yields faults that are tricky to find. Simple wiring yields faults that are simple to find.
It's not always clear why the standard way of physically hooking things up in an amp became the standard way, until you try to troubleshoot a build problem in someone's amp with a "creative approach" to making the connections...