Car “lurches” when braking AND car goes over a bump

Typically when this happens (and this is very common for the Gen2) the slip indicator will flash a couple times.

All my Gen 2s have done exactly what you describe. It's not "acceleration" you're feeling, it's more of a very short duration decrease in 'deceleration'.

 

Happening with a bump is the giveaway
potholes etc

 

One of the most common things for new Prius drivers to post about and have to get used to.

Common to all generations of Prius. Here's how it was explained to me on PriusChat thirteen years ago when I had just bought my first Prius, a first generation 2001.

I hadn't experienced it yet when I posted; I just saw all the posts about it being something everybody knows about, so I asked to be brought up to speed.

The explanation isn't any different thirteen years later. The key thing to know about it is it happens during gentle or moderate braking—if you're braking more forcefully, the car will already have made this transition, so there won't be anything to feel—which means you've got plenty of braking left if you just push your foot a little farther down.

Cars that don't try to combine regen and braking control with the brake pedal (like Teslas, say, where regen is when you back off the go pedal, and the brake pedal only works brakes) don't have this effect.

The advice that was given to me when I asked is still the best: go find a piece of road with some bumps, rough spots, manhole covers, etc., and do it until you know what it feels like and when to expect it. Then it won't startle you at some other time.

In the Prii that I've driven, I generally haven't noticed the traction light coinciding with it. The transition the car is making here is more of a prerequisite step that could be followed by traction control or ABS; the car at this point is just phasing from two-wheel regen to four-wheel hydraulic braking so it will be able to employ ABS or VSC if needed.