The engine is acting just as it should. Turbocharged engines are low compression engines. Boost will build compression. Turbo's are for high speeds, not take off's. What there doing is fun but it's not telling the whole story. I didn't hear a compressor bypass valve blow off as he was shifting. Couldn't read his boost gauge to see what it was spiking too as it came on. Boy it did come on though. I think he had it geared too low, a common mistake guys do with turbo's. Once a turbo engine stops pulling, boost drops off and you can feel it nose over. Shwitzers are good turbo's, sounds like they had it running on the rich side, could see fuel smoke as well. They didn't have to make the car so ominus by adding the turbo and intercooler. Adding a roots style blower with it sticking through the hood is more like what these guys should have built. Superchargers make boost off idle, massive low end torque. These guys would have been happy.
As for racing this car. Beware!!!! Turbo's come alive way down the road in top gear. A 235i would take it starting off. Me driving the turbo car, I'd let the i car go at take off. He's not going anywhere so why bother outrunning it for 50 feet. Once first gear reved out, boost should be up. Second & third gears would go quick, somewhere the i car fell behind, it'd happen so fast you wouldn't have time to see the flash. Once in top gear things would really start happening. I know the front ends on these cars is wayy to light. If the driveline can take the huge amount of torque being made and the front tires stayed on the ground, it would be scary fast. They could have left all the interior in the car and added a roll cage. The extra weight of the cage would help stabuility at high speeds and keep the turbo working. Resistance builds boost. Just turning into a headwind will move the boost needle. Geared right, he's got a 200+ mph car there.