I went through this question myself some time back and what I was able to figure out is with VDC off, traction control and vdc are disabled.
You can do burnouts, power slides, and anything else you want. I have the sport so have the vLSD. The ABLS light comes on occasionally, but I think its only when one wheel starts to spin before the vLSD locks up....whether it applies brake or not I couldn't really tell, but I think its only momentary until the LSD locks and then you can continue to power slide all the way to rev limit...
I'm pretty sure I only experience it in low traction conditions such as rain and have not noticed it during dry conditions...
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