I went to pass a car and since it has been raining, I kept the pedal down in hope of catching traction but I started to smell something. I know it wasn't the smell of the tires but how does it take the power away without lowering the RPMs?

it uses the brakes and the antilock braking system. you were smelling the brakes cooking. the wheel sensors tell the computer how fast each wheel is going and compensates for slippage by appling the brake to the wheel that is going faster

The more sophisticated traction control systems also cut back on fuel to the engine. I'd expect Lexus to use such a system, but maybe not.