The switch turns auto slip reduction On oor OFF. The ASR light is indicating a fault with the system.

When I replaced the battery in my 2002 E320 (same body), this triggered the ABS/ESP light (similar functions as ASR). There was a very easy reset for this, although I am not sure I remember what it was.

If you have very recently had the battery disconnected, with engine runnibg, try turning steering wheel lock to lock a few times. The reset was something like that.