I better think it is for the calibration. the l/c selection is made with the switch, not with the relay
more lc meters with explanations here : **broken link removed**
hope this helps.
Reset Switch - Resets capacitance / inductance readings
SW2 Switch - Capacitance / Inductance switch
Grounding PIC16F628A PIN12 displays the initial frequency of the LM311 oscillator which should be around 550KHz. This is usefull for testing LM311 oscillator.
I didnt make this, but I supose it is for switching what you measuring L or C.
And reset switch is for calibration. They say: "Another neat function is reset switch that will reset the initial inductance / capacitance, making sure that the final readings of the LC Meter are as accurate as possible."
Of course maybe I made mistake, I didnt try this circuit.
the relay puts a second capacitor 1000pF in parallel with the calibration capacitor of also 1000pF
that's all it does.
this changes the frequency of the lm311 oscillator, and thus permits the measure of the frequency with the pic
this does not change anything in the measurment method, only the measurmenent frequency gets doubled.