AMP stood for Automatic Machine with P for Pump. The gravity drain model was AM. The 100%  of the time lid switch was to provide a water level metering system  because of the construction of the machine which was essentially a solid tub machine when most manufacturers of solid tub machines used a timed fill which Maytag would eventually use in the 104 bol automatic without the clunky lid switches or agitator float so just the wringer washer agitator.

As to why they built the machines this way, I don't know and I don't know anyone who knows. Yes, they were terrible at sand disposal. Early CU reports show the machine with the perforated tub removed and the the sand sitting in the tub that holds the water. I remember neighbors coming home from a lake with a beach and running the girl's swimsuits through several warm rinses in their AMP before giving up and just deciding to hang them to dry and once dry shaking the sand out. Maytag claimed to have one tub for the clothes and one for the dirt, but unfortunately, the heavy dirt tended to stay in the tub for the dirt.

As others have suggested, maybe the lid switch arrangement was a way of hiding the pathetic washing action from buyers who thought that they were getting the same washing action in the automatic as they got in the wringer machines, which had very good washing action. Robert calls this a "Forbidden Cycle." Unfortunately, the same Gyrafoam agitator that worked so well in the wide tubs of the wringer machines was not the ticket for the narrow tubs of their automatics, made narrower by having the two tubs bolted together, but the red agitator and white tub looked so good on the sales floor. Consumer's Research Bulletin in an early test estimated the usable capacity of the machine to be 5 lbs.

About abrading clothes, the bolts were not needed for that. Many older Maytags, even beyond the AMP machines, showed the wear on the fabrics in the area of the tub opposite the high fins of the Gyrator or Lint Filter Agitator as it later was called. When heavily loaded, the turnover was so poor that the load was dragged back and forth especially in the zone of the fins. The fabrics, over the years, would wear the top white coat of porcelain away exposing the blue base coat of the tub on the tub opposite the fins.