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I don't know about the twin stick setup, but yes - when in 4hi the 203 acts like a diff. & will send power to the easiest axle to turn. When in "loc" it locks the case & sends power to both axles.
Why not exactly . The 203 going into the trail rig ( part time ) is getting the twin stick setup my friend Allan made . It will look cool , and unlock the front for easier turning .