Non-hybrid manufacturers of FWD and F/awd are going to somewhat extreme measures to eliminate the hazards arising from engine compression braking on the front, stearing, wheels. On the other hand hybrid vehicles would not be as viable if regen braking could not be used during most coastdown maneuvers. A connundrum, that.

So the compromise is to disable regen braking at the slightest hint of the potential for loss of directional control, impending wheel lockup and/or outside temperatrue hovering near or under freezing.

The OP describes exactly what I have experienced on my current '07 TCH and my previous '04 Prius EXCEPT my experiences were always associated with a patch of slippery road (wet leaves, wet railroad crossing mat) or even a slight bump in the road where the tire may go airborne mometarily while I'm slowing down.
I just attributed it to the changeover from regen to ABS (not regen transitioning to normal non ABS mechanical braking).
This problem has existed since day one for me. I never considered it a safety issue since the switchover takes a small fraction of a second but I am amazed the TCH and older Prius' are not part of the same investigation as the '10 Prius regen/abs switchover issue.

The way it reads to me the transitional aspects of the 2010 Prius are MUCH worse that what we see/feel in earlier Prius MYs. Apparently instead of a short, momentary "lurch" feeling with the 2010 model the transition to frictional braking sometimes doesn't occur at all.

If you believe the trade rags this morning Toyota is possibly going back as far back as the '05 Prius models. Why not include '04 too? And throw in all the Camry TCH's for good measure. Why all this nickle and diming with model years? If the car has regen and ABS capable brakes, fix them.

The different models very likely have different designs, with different parts and different software. It is very likely that a particular issue does in fact only occur in certain models, because the bad part or software is present only on certain models and not on others.

I too have occasionally noticed a fractional second of non-braking while I have been braking lightly during a long approach to a stop. I just realize that there are two different sets of brakes in this car, along with ABS and VSC, and that the transitions between modes are not likely to be completely smooth.

I don't consider this as a defect at all. It is just a characteristic of the system. When I _really_ want to stop _now_, I just put firm pressure on the brake pedal, and the machine stops as rapidly as traction allows. I normally keep plenty of following distance, and stop with 10 feet or so of clearance between me and the car in front, so I rarely have to do that.

I see a lot of drivers following with less than one car-length, at speeds upwards of 50 mph. When they hit something, it is not a brake failure. It is just careless driving.

On the other hand I have had two minor, almost meaningless, rear-enders in the last 10 years, the second just weeks ago, wherein I am fairly sure ABS played a key role.

Dry pavement but with SOLID/HARD braking and ABS kicked in resulting in my just barely "kissing" the rear bumper of the car ahead that had just unexpectedly stopped.

Which just confirms what SteveHansen said, "careless driving". If you are driving so you are not able to stop without touching the vehicle in front of you, you are driving carelessly. Either your reaction time is delayed, you are distracted, or you're following too close...or all three. "Careless driving"