I can't speak for S4s but I can for the GTS. There is a definite reduction in torque for the A/T 1-2 and 2-3 shifts. If you recall, the GT had more HP than the A/T S4. I think one reason was the A/T transmission. I think the way the A/T GTS got to keep 345 HP was by sparing the transmission on these shifts.
A seat of the pants measurement, in the A/T S4s that I've driving I don't get the same feeling of power reduction on upshift as with my GTS.
This feature was introduced for the '87 MY.
Loosely translated from the Porsche dealer information book preceding the S4 introduction:
"Since the engine has very high torque which must be handled by the shift elements [.....] torque is reduced during shifting at higher partial load or full load above 4000 rpm when gears 2 and 3 are engaged.
To this end, a switch is disposed on the thrust bearing of brake band B1, which sends a signal to the EZK control unit when opened and closed. When the signal is sensed, timing is immediately retarded by 16° for 350 ms (when upshifting), which results in a torque reduction of approximately 25%. Then, timing is ramped back up to normal within 150 ms. When downshifting under load, the same torque reduction is applied, but only for 50 ms.
If the switch in the transmission is sensed to be faulty, rapid rpm changes, as they occur during shifting, will also initiate the timing retardation (fault mode)."
Transmission protection switch
The overload protection switch or transmission protection switch has a two wire connector on the drivers side of the transmission just left of the vacuum modulator. The plug is a female connector which attaches to the 2pin counterpart which is screwed into the transmission with a but copper colored round-shaped nut.
The connector connects a wire to a three pin two wire connector inside the car in the spare tire well right front corner. It is supposed to see open in P and N , closed in drive . It feeds 12 volts from the EZK ecu to the switch which is then connected to ground by the switch. The pressure-switch closes when shifting 1-2 nd opens from 2 -3 and also closes when shifting down from 2 - 1st ....it momentarily retards ignition timing. The Ezk has an input that is used for this transmission protect feature. The Ezk retards briefly by 16 degrees to reduce the torque and allow the brake bands / friction disks to get a firm grip again when changing gears.
The signal path is this: Ezk pin 26 to CEB V12, from there to U22 of the CEB, then to T32 (in the spare tire room) and to the switch, from the switch to T32 and to GP IV which is chassis ground.
If you disable the Trans protective circuit which was installed on all 87 and up cars the controller will default to an emergency run program, retarded timing.
The controller looks at the switch to see if it is working on or off if not retarded timing. You can verify with a timing light and the switch disconnected
The transmission protect switch reports a gear change under load (>4000Rpm) and takes the timing back for 16 degrees during 350ms. This is donw over the EZK, and us meant to reduce slipping of the friction plates and brake bands.