Hi Crab, in the AS332L2, an engaged mode that cannot hold the selected parameter +minus a small value, will flash amber. No aural warning.
My understanding of this approach was the V/S was active to a preset ALT.A. So ALT would deploy at the set altitude. The previous stabilised approach during the descent then destabilised as there was no automatic or manual modulation of the power (collective).
As an aside, we spent many years teaching ourselves to reduce the IAS for an approach to minimums. Odd really when our FW brethren cant do that and have higher speeds and lower minimums than us. In 3 axis AP and modes its seems more prudent to mandate an approach speed at a minimum IAS of 100 KIAS. This provides some reaction time to modulate power etc. Flying a descent at Vy leaves little or no margin for correction if the IAS is allowed to tumble backwards with the PV curve working against the crew.
For 3 axis approach it is better to fly with IAS engaged for the descent as in order to maintain the glidepath the PF must routinely modify the collective setting which in turn keeps the control in his conscious mind at any level out for an MDH/A. This combined with a sensible IAS for the descent provides some protection albeit human rather than automatic.