As an S3 owner I can tell you now that the 1/10th of second for it to switch to AWD does not stop you doing this and you would never know it was not permanent AWD
I've not driven an S3 but other non permanent 4WD cars I've driven have had more of the usual 2WD drive handling issues until the limit. Hence why I like permanent 4WD in general (my current car's default is 60/40 rear biased which seems to keep understeer more in check).
Maybe that's changing with newer cars just what I've noticed before.