Just to further confuse a new owner, you can do a slight mod and be able to operate in 2-Hi, 4-HI, 2-Lo, and 4-Lo. Then it is handy for the 4WD light to work, esp in 4-lo vs 2-lo.
Mine is set up this way, and I can leave the transfer case locked in 4X4 and just use my electric lock switch to lock or unlock the front axle at any speed, all at the flick of a switch. And, the 4wd light tells me what the front axle is doing.
My next mod will be to have a true neutral in the transfer case.
418 miles on 19 gallons of gas. Can't beat the BBD !