When you put a street bike component on a dirt bike there are bound to be problems. Electricals and dirt don't get along. The more electrical components a dirt bike has on it the more opportunities for niggling electrical problems.
Have I seen the problem before? No, but anticipated it the first time I saw the combo switch KTM used on the RFS. It is the same unit Ducati used on the 916 and is a stark contrast to the sealed rubber-covered kill switch we are used to seeing on a dirt bike. If I had one I'd separate them into two switches and put the starter button facing straight up - still able to be used while holding the controls but would take a concious effort to reach.
Hopefully the contact cleaner will take care of it for now. Good luck,