A place for more technical discussions. Please make sure you post in the correct section on the site, this way it keeps the site tidy AND ensures you get a more relevant answer.
Transfer case engaging is different to the hubs engaging. In normal driving the hubs are spinning with the wheels and the driveshafts are stationary. If the collar is loose and comes into contact with the end of the stationary driveshaft then it would make a bit of a racket, so that explains the noise.
The collar is held into the part of the hub that moves back and forth with the vacuum by a wire ring. The lip this ring registers on wears and then the collar becomes loose. Time for a new hub! If you ask around here are plenty of used ones available for pennies because people love to fit manual hubs instead.
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