I just noticed this same thing on my car yesterday. I turned it off to see how well it was doing its job on some snow, and it would not go into first either. I figured it was a safety feature, and went on my way after seeing it would downshift when I had the TC back on. I wonder if you removed the sensors from their positions (speed sensors and such) and left them plugged in, would the car then not be able to activate the TC? I know it works with ABS on most cars. You can break the sensors, get an ABS light, and observe that the car does not pump the brakes for you when you might need it. Same car, leave it plugged in, removed from caliper, no ABS light, no assisted pumping....

Might be something to it, but I don't think I will be trying it on my car....