[Newell Tank]

My model doesn't seem to have the limit switch you speak of, and my toggle switch is center loaded, so a person can't walk away anyway, since it pops to "Off" when the toggle is released. I can see where the limit switches on such a model as yours could be a bother if they repeatedly malfunction, and a person didn't ever leave the area of the reel. I can see the benefit in being able to leave the reel on while guiding the plug, out of say dirt or mud, or something to and from the electrical post at a campsite, and having the reel automatically shut off at either cord limit.

If the reel was a model like mine, it could be the rear guide rollers are jammed wide open by the back cord collar when it stressed the cord to its limit as admitted. The fix could be as simple as pushing back a little cord, as you suggest, and then tapping on the roller carriage to dislodge it, and reclose the circuit, and a little dry lube or WD40 on all the roller carriages to prevent a reoccurrence.