Yeah that safety has stalled me once but the bike won't start without the clutch pulled and the bike in neutral , had plenty of bikes that would work with one or the other and thoa is the first bike I had with the kickstand safety that kills the engine if you accidentally have it in gear as you release your clutch upon parking. Don't think it would do much to stop a tip anyway.
"Isnt the system designed more to stop you pulling away and riding with the sidestand down?" It will kill the motor with the clutch pulled, sidestand down, the instant the neutral light out.
So it can also be the neutral indicator switch. After I bought my 1998 1200 Trophy last year and did a ton of work on it, I test fired it and all went very well. Rolled it off my lift, got my gear on for a test ride, went out to start the bike in the driveway and nada. Rolled it back up on the lift and bike fired right up, off the lift no go. That's when I checked the neutral switch wire and found it broken. With the kickstand down, bike would not start (even tho it was in neutral), kickstand up, fired up no problem. When I soldered the wire together my neutral light came on too (I thought the bulb had burned out).
I would check the sidestand switch first since it is the most likely culprit and may not be clearing the safety circuit, then move on to other possiblilities. If you want a diagnostic based on the wiring scheme just ask.