But I seem to get a different result. I use the manifold structure to pull back balls around each point in $S$, and take the union of all these 'balls in $M$' and call it $A$. I then take smaller closed balls in side each of these balls, containing the points of $S$, and take them back into $M$, take their complement, and call it $B$.
So in short, I have $M$ is the union 1) of an open subspace consisting of a bunch of 'balls' around the points of $S$, and 2) the complement of the union of a bunch of closed balls, contained in the open balls of (1).