I have an S60 AWD w/the Thor package from the factory - Gotenburg.
Your question is what changes are made to the 17" thor AWD models?

My answer is: It is my understanding that the speedometer must be adjusted. The tire makes less revolutions in 17" vs. 16" trim. Also, if you check your fuel filler door, you will see specificications on tire pressure. Yours will be for the 16" tires not the 17" tires.

Now, regarding the rubbing, I am not aware of any suspension adjustments that Volvo Sweden makes to the 17" AWD, but it is possible. Why is it possible you ask. Because my AWD handles like it is on train track rails - I point it somewhere and it goes. Further, the wheels do not rub. So, I would not entirely rule out the possibility that there is a 1" difference in ride height between the 16" wheels/tires and the 17" wheels/tires.

I would go to my dealer and complain vigorously. It could be a safety hazard if your wheels continue to rub and the thin sidewall ruptures at speed. Additionally, if there is full compression in one corner and the tire is turned in either direction, the rubbing could prevent you from changing the steering geometry (you won't be able to turn the wheel!). Finally, my Pirelli P6 Four Seasons cost $157.00 each, not including mounting and balancing. So, if those wheels rub and need to be replaced someone will have to pay. If the tread is o.k., but the wheel needs to be changed because the dealer made a modification that they should not make, I would argue that they pay for the new wheels.

The bottom line is I would advise them, in writing, of your exact experience as you have outlined it on the brickboard and tell them that if this thing doesn't work out then you expect a) the original rims back; b) the factory adjustments as for all 17" cars; or c) an agreement that they assume responsibility for all future problems, new tires/wheels, you life and limb if the tire explodes and the like. Go get 'em.
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2002 S60 AWD 17" thor wheels