Why doesn't Atmel TWI support I2C START BYTE on TWI?
This particular implementation of a start byte (send a start, a dummy byte and a restart) is meant for slower I2C hardware that relies on polling instead of using dedicated hardware to detect addresses auto-magically.

I'm sure that 'simplicity' is the reason this mode isn't supported in hardware - less gates needed in the TWI peripheral, less control registers, etc. That being said, the implications are minor - I'm pretty sure you can do this sequence manually (i.e. in your firmware) instead of relying on the hardware to do it for you, if you have an oddball peripheral that actually needs this mode.