I had a Passat CC manual which also has auto-hold. It must be using the brakes because once you stopped and let go of the brakes it would not roll forward or back. It cannot have used the clutch because it did it when not in gear.
It will be using the same way of holding the car as the electronic parking brake does.
The DSG is not an automatic gearbox like a torque converter. It has two clutches and select the next gear (up or down) ready for the next (automated or manual) change. Changing down the car also blips the throttle. You should not keep the car in gear and hold it on the foot brake for long periods because it will be slipping the clutch which long term cannot do it any good.
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Volkswagen Passat - VW DSG - Auto Hol.. new
Volkswagen Passat - VW DSG - Auto Hold .. new
