Lots of ways to make this type of transfer happen. Biggest thing is the AHJ ( Authority Having Jurisdiction). First and foremost the switch needs to be UL listed for the purpose it is being used for, Next if the Utility company has a list of allowed installs and last the city, county or state. Put a UL listed installed per NEC next to your service entrance section and the meter reader or any utility worker see's it and it is not allowed your taking it off or they take the meter.
break before make, just means that one thing only happens at a time. with the hot and neutral both going thru this switch only one source of energy is present leaving that switch at a time and there is no way for it to not happen that way, unlike just back feeding a breaker.
And no power from the generator should only be going from the gen to the switch and out to the in this case to the furnace. Even if the power came back on it wouldn't be going to the furnace. If power came back on and the gen was running no mixing of power and once your gen ran out of gas.... Your furnace wouldn't be working until you flipped the switch.,