It does the same thing--disengages the gears inside. The transfer case has its own neutral position in order to shift between its two gear ratios, high and low-range. If you were to tow the 4runner with the drive wheels down, you can shift the transfer case into neutral to keep the transmission output from spinning and save a little wear. The transfer case neutral doesn't have too many uses on its own aside from a transition from high to low-range.
If you have friends you like to play tricks on, you can shift their transfer case into neutral when they're not looking (make sure the parking brake's on). Then they won't be able to figure out why their car won't move.
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Toyota 4Runner 4WD system?
Linear Mode
