The light is just an indicator to let you know the trans is in limp mode
They cannot add several trans
Trouble Lights, so there is no “2-3” Trouble light
all trans issues are displayed by a flashing od light
This is covered in your user
Manual
Your dealer is wrong
Flashing 4x4 lights again mean there is a trouble code stored. Usually the flash because the speed sensors don’t match what is expected to be seen, like slipping in the transfer case between the input shaft speed sensor and the output speed sensor.
I have replaced countless control trac t cases I order to keep older explorers on the road. In 97 the gem module is the 4x4 control trac control module. The lights may actually flash in a sequence which is telling you the trouble code the t case controller is having (gem module) communications issue? Really? What was the fix? Keep driving? Did they eve check the fluid?
Control trac transfer cases do not self heal
Neither do transmissions
Show Me where this forum told you to ignore the flashing transfer case lights and I will show you 100 threads where they definitely did not.
Dealerhsip tell you that? will that I can believe… and you need a new dealership service department
Read your owners manual about the flashing lights… it will tell you to seek repair immediately