The normal wiring of an ignition key switch for a Johnson or Evinrude outboard engine is shown in detail in an article in the REFERENCE section. See
Ignition Switch Wiringhttps://continuouswave.com/whaler/refer ... witch.htmlA table there identifies the wires by their insulation colors and shows which ignition switch terminal they should connect to.
Consult the linked article for advice. Check that the switch you are using conforms with the contact scheme described in the article. Disconnect all conductors from the switch and use an Ohmmeter or continuity checker to verify the switch behavior. You perhaps have gotten the wrong switch.
Also, the conductor for the B terminal should be a RED with VIOLET stripe conductor, which is a fused 12-Volts from the engine harness, protected by a 10-Ampere fuse under the engine cowling. Perhaps the the wire you describe as having RED insulation is actually a wire with RED with VIOLET stripe insulation.
Also the conductor at the S terminal should be YELLOW with RED stripe, not RED with YELLOW stripe.
Another possible problem is that the wiring has been changed at the engine and is no longer in the original circuit configuration.
Another possibility: you have made an error in wiring to the switch; re-check all connections at the switch terminals.