The S1 and S2 switch to control the output banks. The purpose or use of 4 options is as follows:
1) The most common use case is the design engineer wants to use it as PLL (zero delay mode) like you. Set S2 = 1, S1 = 1.
2) Other customer also use this CY2309 as a buffer( NO zero delay).They use this mode for JTAG testing.Set S2 = 1,S1 = 0.
3) Just to use bank A and disable bank B to 3-state, then set S2 = 0, S1 = 1.
4) Just to disable both banks to 3-state, then set S2 =0, S1=0.
The PLL is running in all cases except for case 2. In this case the PLL is powered down to save power since this mode is just like a buffer. In case 1, your output will be the same as your input with Zero Delay. In case 2, your output will be the same as your input with NO Zero Delay like a normal buffer.