When the EPA test cars, they use a piece of equipment known as a dynometer which keeps the wheels moving on the driving wheels when the non-driving wheels are stationary.
The ECM processor in modern cars detects a fault with traction control and electronic stability in such cases. VW changed this into a "test mode" which they could turn off the traction control, electronic stability and lower engine emissions at the same time.
It is more likely that the EGR (Exhaust Gas Recycler) was enabled during the "test mode" and disabled when in "road mode" as it reduces emissions by recycling the burnt exhaust gases in the engine instead of using air from the intake, since EGR is only found on diesel engines.