Apologies for incorrect writeup. Described operation has helped me but I now admit my assumptions may not be correct as I didn't dig into the issue deep enough.
I had some experience fixing mirror memory issues on General Motors cars, which use potentiometers to "remember" mirror positions. Link:
http://www.wjjeeps.com/mirrors2.htm Potentiometer contact become loose or get dirty so mirror "forgets" it's position. This is what mislead me.
As I will be swapping mirror caps soon and I will return to investigation of how mirror memory works on A8 D2s. It may use magnetic sensors to actually remember mirror position.
Edit: If mirror memory works properly I have discovered that it is possible to change position of mirror element by hand (even if car is fully off and locked). After car is opened the mirror will return to original position (with ignition or by manually pressing the "1" button -- I don't remember). This means there is a sensor (or two sensors?) in mirror housing that independently measure position of mirror element in space and gives feedback to mirror ECU.