Hi,
the switch is under the steering to the right, I have a 2009 3.8 Pajero for the wife and it has all these bells and whistles, I took it offroad in advanced drives (big Side Slopes and side crests) a few times and I LOVE the traction control, just make sure the switch is pressed and ASCS OFF is illuminated on the dashboard, that's when the stability control is off, and the "Offroad" traction control is working...
the traction control should not kick-in while side sloping, unless you are going too slow and digging, which is dangerous in all cases and the traction is actually trying to help you avoiding a side stuck, if it kicks-in while you are going with speed this means that the switch is not pressed and "on-road" traction (Stability Control) is effective, which will kill engine power and brake tires unnecessarily risking getting stuck or rolling over.
when the switch is pressed and all is good, this traction can work very good when you are about to get stuck and brakes the tires which lost traction (significant wheelspin while the other tire is almost stopped), and I never felt it was annoying, it doesn't kick-in when the car is going with good speed and momentum... and there is no engine cut-off at all...
I prefer the Xterra power offroad, so the Pajero is a family adventure car for me, and a good backup offroader as well.