What mechanism works to limit the power to 70%? Is it a design clutch limitation/slippage such that power above 70% results in automatic clutch slippage?
Yes.
Let's look at the G2 as an example.
The engine develops a maximum of 262 lb-ft of torque.
First gear has a ratio of 3.359:1. That gives us 880 lb-ft of torque at the transmission's output shaft.
The final drive ratio is 4.25:1. That gives us 3,740 lb-ft of torque to the front axle.
The iVTM-4 unit has a mechanical overdrive of 2.7%. That gives us 3,642 lb-ft of torque to the rear clutches.
NOTE: Actual torque values will be lower due to mechanical losses, but are not important for this discussion.
If "up to 70% of total available torque can be sent to the rear wheels", one or more of the following explanations can be implied:
1) The clutches are physically unable to hold more than 2,549 lb-ft (70% of 3,642 lb-ft) of torque before they begin slipping due to the surface area, coefficient of friction, and clamping force being applied. This is the most likely answer in my opinion.
2) It may be unnecessary and potentially negative to transfer more than 70% of available torque to the rear wheels since they have less grip than the front wheels due to the weight distribution (~60/40) and because it may result in oversteer due to the 2.7% overdrive. This is possible.
3) The iVTM-4 system is capable of holding all available torque, but with a 2.7% overdrive, windup would occur very quickly causing the vehicle to bog down on dry pavement and/or lose traction due to slipping wheels so the system avoids a "100% complete mechanical lock". This is possible as well.
4) The clutches are physically able to hold more than 2,549 lb-ft, but other components of the iVTM-4 system such as gears, bearings, axles, and/or the case itself aren't so the system limits clamping force being applied to the clutches so that they won't allow more than 70% of available torque to be transmitted. This is unlikely.
5) The hydraulic system is incapable of developing enough pressure to apply the clamping force necessary for the clutches to handle more than 2,549 lb-ft of torque without slipping. This is also unlikely.