The TC numeric value is indeed how much slip is allowed, not how much TC is applied. As such, 99% slip will allow for the most slip and loss of traction, with minimal interference from TC. For what it's worth, this is how RaceLogic's traction control systems worked and yes, with the digital version you could dial in exactly the amount of slip you wanted, from 0% to 100% (off). They were fitted to some editions of the Gumpert Apollo and featured on Top Gear with Richard Hammond presenting that segment - I only remember it because I bought and fitted the same system on my Nissan 200SX.I really hope the 10% means that the system tries to limit tire slip to 10%. On just longitudinal acceleration 10-15% maybe 20% on some tires is the value that gives best acceleration. When lateral forces from cornering are being added 8-12% longitudinal tire slip is about the limit on most cars.
With the red flashing hud I wondered about that too at some point but I have no clue, it surely does not indicate 0.0 travel or height, it must be something else maybe damper speed related maybe something for debugging that was left in the game.
EDIT: Further to that, they worked on the simple basis of measuring the difference in wheel speeds from the ABS sensors - as soon as the measured wheels exceeded a threshold of speed difference, the traction control would cut the ignition spark (with the amount of cut getting more aggressive if slip was still being detected). It made for some quite awesome flames as a load of unburnt fuel was promptly dumped into a lovely hot exhaust .