Volkswagen doesn't develop self-driving tech. They use Mobileye's solution like everyone expect Tesla, Waymo and GM/Cruise. They aren't really in the position to make that argument.

Level 5 means that the car can drive autonomously > 95% of the time, and it will absolutely be possible. Level 4/5 distinction doesn't really make any sense once the autonomy gets beyond certain percentage. It doesn't mean that it's level 4 until it hits 100% (which is impossible).

Level 5 car is designed to drive in all conditions, but there are always statistically unlikely corner cases or situations that require high-level decision making, which the car can't handle by itself. A single driver may never hit such case, and for them the experience is full self-driving.