Here's the best explanation if you don't want to read the whole post!
"Competitive mode does NOT turn off ESC. It becomes more "leniant" before it takes affect.
Basically here's all the systems....
ON - Start car. Everything is on by default. Traction control and ESC.
TRAC OFF - (push button once) Traction control is completely off letting you spin the rear tires as you please, BUT ESC is still fully active. If it senses a slide, it will adjust braking in necessary corners to regain control, or prevent loss of control in the first place.
COMPETITIVE MODE - (push button twice within 3 seconds) Traction control is completely off, BUT ESC is still active, but to a lesser degree. It will allow you to swing the car a bit more aggressively and actually will let you slide a bit before taking over. If it senses a severe slide or loss of control, then it will kick in like normal and apply appropriate braking to regain control.
TRAC OFF & ESC OFF - (hold the button in for 8-10 seconds) You will see the message TRAC OFF and ESC OFF in the cluster. You now have full complete control of the car, in exception of ABS. There is NO way to disable ABS. You could spin the tires and do as many drifts and donuts as you like in this mode....until you run out of tires
After you're done playing around or wish to return to "everything on", you just simply have to hit the button once, and everything will be turned on again, and you'll see the Traction Symbol in the cluster go away.
(FYI - The trac symbol in the cluster doesn't differentiate between modes, anything besides the default ON mode will show the same trac symbol)"