Its an ELECTRONIC LSD, not to be confused with a mechanical lsd.
Electronic systems: brake-based
These systems are alternatives to a traditional limited-slip differential. The systems harness various chassis sensors such as speed sensors, anti-lock braking system (ABS) sensors, accelerometers, and microcomputers to electronically monitor wheel slip and vehicle motion. When the chassis control system determines a wheel is slipping the computer applies the brakes to that wheel. A significant difference between the limited-slip differential systems listed above and this brake based system is the brake based systems do not inherently send the greater torque to the slower wheel.
BMW's electronic limited-slip differential used on the 2012 535i is an example of such a system.