[nsjames]

hold the button in longer for DSC off and it will let you slide sideways in a power slide.

it will not let you do a complete donut. Cuts the throttle about 3/4 the way through.

personally verified in my 08, YMMV depending on whatever.

the only time I've ever felt shudders from my transfercase was on hard surfaces in a tight turn, it had 110K miles on it and had never been serviced.
I changed it's fluid and did the reset and I've never felt it since. Currently at 155k. Two winters.

I don't know why they would feel the clutches engage and disengage, they're already engaged. The system splits 70/30 all the time.

there's currently 2" of slush on the roads and it's all going to freeze tonight.
I will do more testing, for science.

edit:
you know, that guy has a 335, so it's possible that with the aditional horsepower it simply overwhelms the ability of the case to cope, maybe even hits parameters BMW has programmed in to protect it from exploding.
I am a lowly 328.