The transfer switch is in the rear near where the power from the post comes in . Not on the generator . Normally it's in a gray electrical box in the basement wall or ceiling. Generator gets priority and overrides shore power.the generator will start and stabilize before the switchover begins , that can take up to a minute . It is capable of switching instantly under load and designed to do so ,however if you do it a lot , the contacts can wear and eventually fail so most would tell you to remove the "load". . You dont need to unplug ! just remove the heavy load ... i.e. turn off the ac / heaters etc.
the other problem is switching the generator off while under heavy load as it's tough on the electrical windings in the generator and can eventually damage them. Again turn off the "loads" before shutting down. I'm not a electrical engineer but I was told this by a couple service centers dealing with them (generators)