Hey, FrkyMnky. The kickstart gear rides on a spiral-spline, and moves inboard to engage first gear when the kickstart shaft is rotated. It disengages when the shaft reverses direction, or the engine starts (which rotates the gear back up the spiral-spline). So, it doesn't have an overtravel disengagement point like on some other bikes.
Info:
http://www.xs650.com/forum/showthread.php?t=772