It had essentially a locked differential. This means that both drive tires are being driven at the same speed at all times.
Pros: Extra traction. An open differential such as on a modern passenger car really only drives one wheel effectively, since as soon as one wheel breaks traction you lose acceleration. A limited slip differential is a step up, in which there is a small speed difference allowed between the wheels, and a locked differential is maximum drive traction.
Cons: Reduced handling. A locked diff reduces how easy it is to make the car turn corners. It will cause the car to try to drive straight. This can be a problem, but the 935 had so much power that 1, it needed the extra traction on the back, and 2, the extra power meant that it would wildly oversteer in corners (oversteer is when the rear of the car breaks traction while cornering and slides out). The locked diff tamed that a little and allowed extra power down during cornering.
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