how exactly does it work? When you flip the switch into 4Hi all four wheels do not spin, do they?

 

Not unless you have Lockers front and rear. It depends on the system, Auto/Manual hubs, etc.

 

The transfer cases can direct power to the rear wheels or both by turning the switch from 2 Wheel Drive to 4hi or 4Lo. The t-case then engages gears and a chain and drive the front wheels along with the rears. Yours has the option of using an Automatic 4 Wheel Drive. I didn't feel like retyping all of this so I copied it. In A4WD, the generic electronic module (GEM) varies the torque split between front and rear drivelines by controlling the transfer case clutch. Under most conditions, the GEM activates the transfer case clutch at a minimum duty cycle (percentage of time the clutch is turned on) which allows for a slight speed difference between the front and rear driveshafts which normally occurs when negotiating a corner on dry pavement. When the rear wheels are overpowered, the GEM detects this slip condition, and the duty cycle to the transfer case clutch is increased until the speed difference between driveshafts is reduced. In this manner, the GEM can redirect up to 50% of engine torque to the front wheels when the rear wheels lose traction yet still allow operation in the A4WD mode on dry pavement.

Regards

Jean Marc Chartier