From what I was told, by the guy who dyno tuned my car, torque management is there to protect your drivetrain and driveline components from taking a beating when you're getting on it pretty hard with traction control off. Supposedly, it is more noticeable in the autos than the manuals. Having it totally removed won't make that big of a difference in ET's for street applications. But for heavily modded, high horsepower engines used mainly for drag racing, having it taken off will aid in the every-little-bit-counts aspect of racing.
Maybe there's another explanation out there but that's what I was told.
As far as how the computer manages it, I didn't ask that. But I think that it's probably controlled the same way traction control is. Just at a lesser rate.