Ah yes, old_Kaw good eyes. It appeared cut to me, but I think you're right, it's just behind the frame.
Kawasaki eventually corrected the solenoid wire color discrepancy on later Kz's. That snippet must be from a much later model due to the 3-phase permanent magnet charging system shown.
Here's a snippet from a 1977 Kz650. It pretty much matches Ed's photos exactly. It also shows the wire-color irregularity on the starter solenoid. The 550's and twins are like this and quite a few others if I recall.
Often, a technician will put the wires in a more logical state, that is...connect the hot side using the yellow/red wire, but untouched examples I've come across have the yellow/red to ground.
This is actually the C1 diagram, but the charging system and starting system are same for B1. (C1 adds hazard lights.)