IWE for dummies- IWE is "Integrated Wheel End", meaning the disconnect from the drivetrain is at the wheel. The 4WD is always trying to engage due to the design, but there is vacuum that keeps it from doing so. When you engage 4WD, the vacuum is released, the IWE meshes and 4WD happens.
So having vacuum is critcal to not engaging the IWEs. Your engine makes vacuum at idle, but if you floor it, or if it's boosted- then you have no vaccum during boost. Therefore, Ford uses check valves and vacuum tank to maintain the vacuum to the IWEs during the periods when there is none.
If the check valves (or the lines going to the IWEs after the tank/valves) start to leak, then the IWEs lose vacuum and start to engage and you heard a grinding as the two parts start to mesh, but can't fully do so as there is still some vacuum preventing it.
Ford has run this exact same system since 2004 on all F150s. 97-2003 was more a robust setup that didn't fail, but it got worse MPG as more stuff was turning when not in 4WD, which is why Ford went to the IWEs.