OK, I got the car back a day or two ago but just received the paperwork. The resolution was indeed to replace the air oil separator.

They initially tried to replace a vent pipe related to the crankcase bleeding tank ventilation pump (parts 9A110754270 and 9A111004272) but this did not fix it so that's when they whistled up the air oil separator from Germany (9A110704002). Now it's happy

My car has just over 33k miles on it so I guess this problem may happen to older cars as well as new ones on occasion. The did cover it under warranty though.

 

Are there many cars affected with this? TSB or anything?

 

Put me down for same issue / same sound. Currently getting resolved with same fix (I found this thread after diagnosis). 2015 TTS 28k miles, started a month or so ago.