I didn't find the english manual, but at least in this
Swedish one it says the S-Video out is only for the DVD-player, which is what it normally is in (non-SVHS) combos. There are a few VCR/DVD-recorder combos that have S-Video out for the video section like the Panasonic DMR-ES35V (and related) and LG RCT689 which I have one of. In those the video signal go through the internal analog to digital conversion though, and at least for the LG, is connected via composite internally.
If this unit indeed has S-Video out for VHS it would be interesting.