What should I do with old switch wires?

I am redoing all my electric (some details here: Is my new electric/subpanel plan correct?) – all of the cables currently in the house will be eventually disconnected, but (due to staples in hard-to-reach places, etc) I don't plan on necessarily removing/ripping them out.

I have a switch in the bedroom and a switch in the office that… I haven't been able to identify. It's right where a light switch would be, but there are no ceiling-mounted light fixtures and I've tested every outlet – none of them are controlled by it. The switch appears to be wired in a switch loop – see the picture below.

I need to remove this junction box (to install a larger one and the new switch/cable) – what should I do with this wire? It will eventually be disconnected (when I switch over to the new panel), but while it might not be right now, would it be safe to cap the individual conductors separately and shove it into the wall cavity to "kill" it? I'm not sure where it connects to, so tracing down the other end will be difficult, maybe impossible if it doesn't come up into the attic. I measured voltage across the switch (with it both on and off) and from each conductor to ground (assuming the box is grounded, which it might well not be) and only picked up phantom voltage (11V or less).