This is quite common, TC is kicking in when it really doesn’t need to. One press into sport with the TC button fixes it. You won’t experience any skipping, it’s been in discussion for a while since the FL S3 was released and there doesn’t appear to be a fix.
It’s as you get on the accelerator before any power is put down even, in wet or dry.. can be annoying. If I know I’m going to be intentionally booting it in questionable conditions, I put the TC into sport in advance.
When a driver selects dynamic he disables a portion of traction control. When pressing ESC (once) even more traction control is disabled. When the traction light flashes..flashes..flashes, the car is informing the driver mistake..mistake..mistake.
Over the last year I have had four different types of tyres on my FL RS3. The flashing traction light has responded differently to each of the different types of tyres, so I believe the car is correctly sending information about the amount of traction that is available.