Yes, in the IWE they use crappy little springs on the diaphragm (weak enough to compress the spring with your hand). That is the only thing keeping 4wd engaged, if the teeth are not lined up the teeth of IWE will ride over the teeth of the axle. Eventually rounding the teeth on the IWE, and then it will start popping and clicking while in 4wd..
It is a crappy system for a hardcore 4wd vehicle.. But for the sake of fuel economy and the amount of time "most" people use 4wd.. I guess it works, until you really need it.
-Greg