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That's right. That's how I have my 700R4 transmission wired, and it works great.
If you leave the vacuum switch wired that way, the vacuum switch will not work. If the vacuum switch is wired correctly, the torque converter clutch should disengage when you press the throttle enough to lug the engine, but not enough to shift into 2ND.
The brake switch needs to be closed when the brake pedal is not being pressed. This is the opposite of how the brake light switch works.
I would also recommend installing a vacuum delay valve in your vacuum line that runs to the vacuum switch. This will help keep your torque converter clutch from kicking on and off too quickly. Vehicles that were originally equipped with torque converter clutches had these little valves installed. When I first installed my 700R4 I didn't have a vacuum delay valve, and my torque converter clutch would engage and disengage rapidly if I was right on the edge of the lockup point.
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