The cutout is simply an OFF-ON switch that is normally open. When the generator puts out about 6 volts you want the cutout contacts to close and send the current to the battery. You can test the cutout by applying battery voltage to the case and terminal that connects to the generator. As soon as the 6 volt battery is connected, you should feel a click as the contacts close.
HEY: If you ever find a good tester for that let me know the tester I have never tests it right it is always wrong. So if you find some tester that will test both the cut out and the amp metor or coil and bat. Please let me know. I have a tester that is just for that but it never reads it right so if you find a tester that does test it right. That's NOT a million dollers for it the one I have I think is back words or some thing like that DON'T KNOW so if you find a tester that tests it right let me know. I know some one that has a tester from snyders and it does the same thing mine does. I started to call them never right metors. So please let me know thanks reggiedog. I wish you good luck in your quest.