We still don't get the exact workings of the VDC, seems it is the fully active system in this instance, unless we find more specific detail.
This quote adds a bit more information, but still not specific enough to see the sport setting as a fixed 'passive like' setting as in the E92 M3.
Quote:
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An Adaptive M Sport suspension with electronically controlled damping is also optionally available for the new BMW 3 Series. Based on incoming information about body and wheel acceleration, lateral and longitudinal acceleration, vehicle speed and steering wheel position, an electronic control unit adapts the damper mapping to the road surface and driving situation. At the same time the driver can use the Driving Dynamics Control switch to vary the basic suspension characteristics between more comfortable or sportier settings.
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HighlandPete