Stepping from full TC to TC Off does two things. First is that it allows increasingly more wheelsman on the back before restricting the power delivery. On sand or wet, full TC may give you 2" of the rear stepping out in a curve and the middle selection maybe 6".
The second thing is that I understand each opens up the throttle map slightly more. I've not programmed one of these ECU's, just remember AVC8130 writing about it - and that was for a Gen1 bike.