The 4WD VW Vanagon had “silicone drive”, an admixture which allowed each wheel to drive independently.
I believe you are referring to a Haldex clutch ('on-demand') type 4WD system , as opposed to a 'true' 4WD with a Torsen diff. (full-time 4WD). The Haldex clutch only activates and sends drive power to the non-driven wheels when slip is detected at the driven wheels. But this is not independent individual wheel drive.
The Haldex system is used by VW (and its other brands, like Audi) when the Torsen diff cannot be used, i.e. for vehicles with transverse mounted engines.