I can remember watching a race at Adelaide, when MS was at Benetton. He had an on-board camera. It sounded very much to me as if he was changing down into the gear required for the corner very early, e.g. 5th to 2nd, and then slipping the clutch as he brought it back in. This would have created engine braking without the need for constant gear changing as he approached the corner.
I may have this wrong, but certainly the engine seemed to be screaming at high revs from the beginning of the braking zone until he was pretty much into the corner.
I hate to disagree (yeah, right!!!!

) but I would have thought that what you heard was just MS shifting down rather than activly slipping the clutch and engine braking, as you describe. Behaviour like that is impossible in a modern F1 car, and I believe in MS's Bennetton, because of semi-auto sequential shifts. It's simplest to think of the car as having 2 different ways of controlling the clutch - 1) Manually, by hand at the start to prevent wheelspin from a standing start or 2)Using the paddles to shift gear activates a computer controlled clutch to change gear.
In essesnce if the clutch is even part depressed you are wasting power and the reason F1 cars have computer opertated clutches is to spend as little time as possible slipping it.
The essence of engine braking is to reverse the direction of force. In normal use the engine, through the transmission, provides power to the back wheels to overcome friction and drive the car forward. In engine braking the power is sent
back from the wheels, through the transmission where it increases the engine revs. It is the friction caused by this increase in revs that provides the resistance to the driven wheels, which slows the car.
The problem is, in a race engine where tolerances are fine the difference between engine breaking or not can be the difference between a failure or not. Simplisticaly if you are spending 10% of the lap time braking then you should have the power down for the other 90%, which means the engine is, in effect 'unloaded' (or at least running at less than max) for 10% of the circuit. You start engine braking and you have an engine at full stress maybe 95% of the time - the equivalent of adding 3.5 laps of wear over a 70 lap race. Think about the fine tolerances in an F1 car and you can see why this may be a problem. You also, of course add 5% more fuel consumption.
Neither of these problems are enough to stop a driver engine braking if that is there style, or as tak says, if a corner demands it - it's just that it's not the best way of using your resources - remember brakes to go slow, enginue to go fast!