As you now know, the speaker switch in the full forward position plays everything through the headset. In the middle, it plays music through the speakers, but NAV through the headset. In the rear position, it plays everything through the speakers.
You will love this next part.......Unlike when the GPS is used in a car and you can use it as a two-way handsfree device, it doesn't work that way on the bike! Yes, they can hear you, but when the GPS is plugged into the fairing mount it is not capable of integrating with the Harman/Kardon audio system to play the caller's voice. So they can hear you, but you can't hear them.
Everyone has their own thoughts on the subject, but for me personally (although there are times when it would be convenient), I think that talking on the phone while riding is asking for trouble (I scrape people off the road every day for a living). When I am on-call and need phone access, I connect to the GPS and keep the phone in the fairing windshield pouch. If it rings through the GPS, I pull over and take the call using the phone itself.