First of all if you fully defeat the traction control by holding the button you will have TWO lights and you will get a final warning when the second light comes on.
The car is upshifting gear by gear until it gets into a high enough gear so that the gearing advantage will not overcome the tires/traction and then it hooks and bogs. TOTALLY normal. The car is pulling the throttle back and pulling timing on the gear shifts, totally normal. Not shutting down. Would you rather it blow up? When you have 800 horsepower it has to be managed in a certain way to keep novices from blowing up. I drag race all the time. And, gee, I have NEVER done what you are describing. I save my rubber for the drag strip and drive normal on the street and I respect the 800 HP I have.
Ways to prevent some of this is to go manual on the shifter. If things get out of hand it will still force upshifts in manual mode to get things under control, but once you get going you need to start shifting the car to prevent an over rev or slap the shifter over into auto mode. This will probably be more to your liking. Good luck.