Joshua, you have it correct.

The D+ terminal on the alternator should provide a path to ground (as referenced to the case of the alternator you betcha) when the alternator is not turning. That path is what lights the lamp test functions for the battery light and 3 other lamps which otherwise could only get a ground if their warning functions were active.

Once the alt is turning, the triple diode supplies D+ which rises to battery voltage, and the warning lights go out. The small red D+ wire is there to induce a minimal field current to "kickstart" the generation of charging current.

Here is a map drawn to illustrate those paths:


--
Art Benstein near Baltimore

A Freudian slip is when you say one thing but mean your mother.