That’s correct, we break the red wire with the float switch. That way if the pan fills with water, the float switch kills the power to the IFC and the thermostat to indicate there is a problem. Downside to having batteries in the thermostat is they will keep the stat functioning even if the float switch shuts off the system. Then as a home owner, you’re thinking the system is working fine due to the thermostat being powered. Without batteries, the thermostat would be off/blank which throws up a red flag.
That is also correct, the red and white wires goes to your outdoor. Typically we like to use blue and yellow, but as I posted HERE, there is no Industry Standard for using the colors.