First, checkboxes and toggles are not buttons, so that's a slightly deceptive way to describe it. If you use "checkbox" instead, it's immediately clear who's right:

> and the people who think the [checkbox/toggle] should show what state it will change to when activated

These people are wrong. The simplest thing should be the default and this adds extra indirection (projecting future state from current state), therefore it's not the simplest, therefore it's wrong.

Unless of course you mean something strange by "activated".