Found someone that knows how this system really operates. Check out the last page in this very informative link:
http://www.rsgear.com/articles/2008_05.pdf
If you do not have stability control (like me), the xfer case speed sensors do all the work of detecting slip between front and rear. With stability control, the ABS sensors do the task, and xfer case speed sensors do nothing. In 2005 they eliminated the speed sensors, since by then all Ex's had the stability control standard.
Link also mentions ground strap needed if aftermarket gasket (without metal washer inserts) used between trans and xfer case (like when trans rebuild done). Read that posted here as well.
This doesn't make sense to me. You've got metal bolts with its head making metal contact to trans, that same bolts threads making metal contact to xfer case (or maybe its the other way round. Etheir way there are several of these bolts). So regardless of gasket material, how could the gasket disrupt the electrical path?
Plus, on my shift motor there is a factory ground lead on one of the mounting bolts. The bolt head touching the shift motor, then threads touching the xfer case, hence xfer case, shift motor & ground lead all electrically connected = grounded xfer case, no?
I will get under there and measure resistance xfer case to ground to make sure its well grounded. I'll try removing the ground lead to see if it makes a difference. Just for curiosity, and to see if I would benefit from an added xfer case to ground strap.
Meanwhile, my actual issue(s). Seems like ABS light is
not related to my 4x4 lockup, and my issue must be a speed sensor? (its not shift motor, not 4x4 CM, yet 4x4 system thinks rear wheel slipping and sending power to front = speed sensor issue).