It is not discrete time system since discrete time system has countable number of states by definition. The states here are percents of duty cycle (quantity of interest) that changes with infinite number of states in similar fashion to change of frequency in analog Frequency Modulation. Yes I do design and use SMPS in my work. I'm surprised that you're confused by two levels in class D amp but not in FM radio signal. Again, for system to be "digital" at any point it has to have limited resolution (countable number of states) of quantity of interest - duty cycle, which class D amplifier isn't, being completely analog with unlimited resolution. In similar way FM radio signal has two states of voltage, but quantity of interest - frequency has unlimited number of states.
Very early primitive class D amps had digital modulator but these days almost everything is purely analog with unlimited resolution (Icepower, Hypex, NuForce etc.) Analog input voltage turns into analog duty cycle to become again analog output voltage by means of taking average value (filtering) of square wave (50% duty cycle representing 0V). Whole thing is continuous time system and has unlimited resolution unless, of course, amplifier has digital input which imposes resolution limit by definition.
Very early primitive class D amps had digital modulator but these days almost everything is purely analog with unlimited resolution (Icepower, Hypex, NuForce etc.) Analog input voltage turns into analog duty cycle to become again analog output voltage by means of taking average value (filtering) of square wave (50% duty cycle representing 0V). Whole thing is continuous time system and has unlimited resolution unless, of course, amplifier has digital input which imposes resolution limit by definition.