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I've wondered this too and have set both off (too frequently ).
My guess has always been (based on when I've set them off):
Dash light blinking: Wheel traction issue. Happens easily when I punch it from a dead stop going straight or turning.
Beeping and Dash Light Blinking: Yaw / skid issue. I usually set this off when I'm driving very aggressively and slinging the car around turns. Happens mostly on mountain roads I know very well probably because I'm most comfortable pushing the car to its limits there.
If just the light comes on, then VSC traction control is in effect and engine power is reduced only. When the beeping comes on ,you have activated the Vehicle Skid control system which is now modulating individual wheel braking and engine power to prevent a out of control slide. Traction control usually kicks in when punching it from the line (which is why I turn it off, then on after 1st). VSC control comes on when your in a slide or turn. Both use the same light.You should see the expressions on my passengers when I hit a wet offramp at 50 so the VSC can kick in and take control. Works pretty damn good.