From
http://www.subaruforester.org/vbulletin/f89/x-mode-all-you-need-know-321138/
"According to Subaru, "X-Mode takes control of the engine, transmission, AWD, brakes, and other components to safely navigate through bad roads, slippery surfaces and even the steepest hills for maximum confidence."
There are two primary components of X-Mode: Hill Descent Control and Vehicle Dynamics Control.
Hill Descent Control
X-Mode will use VDC and ABS to control your descent down steep inclines. If the vehicle senses you are going too fast down the hill, it will take over the braking. Hill Descent Control is operational at speeds up to 12 MPH.
This can be startling when it happens, because you will lose pedal feel in the brake pedal, meaning it will feel like the brakes failed. This is because X-Mode is applying more braking power than you were. If you push the pedal to the floor, you will override the system and come to a stop as soon as possible.
You will also hear a lot of noises while this is happening. The ABS system will be working overtime controlling each wheel's braking as needed. Pulsating and grinding noises, as well as an occasional "burning odor" from the braking and clutch control. This is normal.
Once you hit the gas again as you are leveling back out, X-Mode will still be active but the Hill Descent Control will no longer be controlling your speed.
Vehicle Dynamics Control and more
Many Subaru vehicles come with VDC, but X-Mode enhances the performance of VDC in limited traction situations. The AWD system on CVT equipped Subarus is improved and it senses more variables than the earlier versions of Active All-Wheel Drive, which primarily focused on wheel speed sensors. Enhanced Active AWD also monitors steering angle, yaw rate, and throttle input.
X-Mode will reduce the sensitivity of the accelerator, which gives you more control to finesse your way through low traction situations without spinning the wheels. Torque comes on more gradually allowing for added control.
Using an enhanced LSD control, if the wheels do spin X-Mode will almost instantly compensate by braking the slipping wheel and transferring power to wheels with better traction.
The CVT is held in a lower gear ratio which helps to generate more power at lower speeds.
The front/rear coupling force of the AWD system is enhanced, helping deliver power equally to all 4 wheels. This transfers more power to the rear wheels than there would be with X-Mode off in the same situation. This is achieved by increasing the multi plate transfer clutch operation strength by 25%.
X-mode is operational in all gears, forward and reverse. X-mode also disables functionality of the SI-drive buttons (S/S#) and disables adaptive cruise control (on EyeSight equipped models).
Given all of the known aspects of X-Mode, we now understand why it can be useful in limited traction situations."
So it has a fully open drivetrain, and what the wheels do is completely down to what the software decides. Just like Mazda's systems.