The power steering takes a vehicle speed reference, and this is used to operate an actuator in the hydraulic circuit. This makes it loose when parking but tight at high speed. If it loses its speed reference it goes to tight mode all the time.

There is a steering angle sensor and this is used as an input to the ESP so the car knows what the driver is telling it to do. This is in the steering wheel hub.

I agree it’s probably a wheel speed sensor going bad, these cars need the speed signal from all 4 wheels to agree and if they don’t they will throw the flag.

Either a true Xentry or a scan tool should be able to tell you the 4 wheel speeds. Slow roll in a parking lot is enough to tell what is or is not happening.

__________________
The OM 642/722.9 powered family
Still going strong
2014 ML350 Bluetec (wife's DD)
2013 E350 Bluetec (my DD)

both my kids cars went to junkyard in 2023
2008 ML320 CDI (Older son’s DD) fatal transmission failure, water soaked/fried rear SAM, numerous other issues, just too far gone to save (165k miles)
2008 E320 Bluetec (Younger son's DD) injector failed open and diluted oil with diesel, spun main bearings (240k miles)

1998 E300DT sold to TimFreeh
1987 300TD sold to vstech