This is a TCS bug since the 1.05 update. I have a DS3 and set up the RA (Driving Options) menu to the R1 menu and all the settings to the D-pad so that I could adjust brake balance during races as I prefer front heavy braking to throw the back end of a car out a bit on corners and I usually forget to set it up before each race. So the RA menu is cool for that.
Here's how I know/think it is a bug:
I have two accounts on my PS3. My main account which was started on Nov 24th GT5 v1.0 and upgraded as the updates came out.
My second account was set up after update 1.05 came out and I've just been racing seasonal events on it for fun, practice and cash (making the seasonal events challenging, etc) and to send a few cars back and two between my accounts to do said seasonal events.
Main account: cannot set TCS once a race has started.
2nd account: in the same races I can adjust TCS mid-race using the DS3.
So it has to be a bug. It's annoying, coz I like adjusting TCS to 0 to try it out, but if it's a very powerful car with crappy tires I want to change it to TCS 1 sometimes. On my main account I have to come out of a race, set it and start over. On the 2nd account, in the same race I just change it mid lap.
Every other setting on the RA menu is available on both accounts. i.e. I can adjust brake balance mid race on both accounts. I can change ABS on both mid race, etc.
I only have a DS3 + a fatty PS3 UK original - the one with memory card slots in it.