A referendum “about the law” is simply a referendum to challenge a law that has recently been enacted (i.e. the type of referenda referred to in the last paragraph you quoted). There is no counter-proposal, no opposition to pieces of the law, no reformulating, you simply get to say yes or no to the whole statute or treaty, as published. That's also why there is no need for anybody to decide where the line between a referendum about the law and enacting new legislation is.
On the other hand, there is no filter or authority that could prevent an “initiative” to put any thing its proponents want in the constitution. That's why many such constitutional initiatives are arguably used to circumvent the lack of legislative referenda and contain things that elsewhere or in other circumstances would be dealt with in regular statutes instead of the constitution (in French such dispositions are traditionally called “formally” constitutional without being “materially” about the constitution of the country).
(In)famous historical examples include the ban on absinthe in 1908 (a peculiarly limited technical measure to put in a constitution, even if it is to be understood in a broader context of temperance movements) and a ban on “slaughtering animals when they are conscious” in 1893 (which was basically directed against Jewish customs). Both of these were in constitution until 1999 (when a new constitution was adopted, not to change the structure of the state but to clean up the text after so many changes).
As another example, the constitution currently contains an article stating, roughly, that policy on nuclear power plants is set at the federal level. That's the kind of things you could find in the German Grundgesetz or in any other modern federal constitution, defining in detail which level is competent in which area, without setting the policy itself.
There will be a referendum in November to replace it with a text banning nuclear power plants, complete with a calendar to phase out the existing power plants. That would turn this constitutional article in an actual policy instrument, forcing the federal council to implement a decision it does not want to take at the moment, and going even further than most laws into details that are usually left for executive orders and the like.
Here again, there is no filter or procedure that could stop the whole thing from happening. If 100'000 people sign and then a majority of the population and a majority of the provinces vote for it, it will become part of the constitution and the law of the land. But there are a few details of the process that are intended to prevent things like clown bans from making it all the way to the constitution:
- Collecting 100'000 signatures within 18 months is not entirely trivial (especially in a small country like Switzerland?). There are certain procedures to follow and the signature must be validated at the communal level (and the time needed for the validation does not extend the delay…). In practice most referenda are pushed by organized groups like trade unions and, usually, at least one political party.
The federal council gives an advice and publishes a whole booklet, with one or two pages about the context, arguments for and against and, on the cover, a sentence bluntly stating
The federal council and the parliament recommend you to vote, on November 27, 2016:
- No to initiative “such and such”.
In a typically Swiss twist, it's not uncommon for the federal council as a whole to recommend voting “no” to something while one of the parties sitting in the federal council actually supports the referendum.
- In some cases, the federal council can even put forward a counter-proposal, to reach the same goals using other means. To avoid diluting the vote, it's possible to approve both the original proposal and the counter-proposal.
As a result, it's not unusual to see referenda that seem like easy cases to make (e.g. a cap on executive pay or six weeks of paid leave) fail in the vote. On the other hand, I cannot recall any recent initiative that succeeded without the support of at least one of the main political parties (i.e. a party sitting in the federal council, including the UDC/SVP, which is behind some of the most debated referenda of recent years).
Finally, note that all of this is relevant to referenda at the federal level. There are also many referenda at the provincial (canton) and municipal level, each with slightly different rules.
