yea, kinda. How it works is that there is a differential inside the transfer case that works just like your axles. It gives equal power to the front and the back untill there is a speed difference between the two, as in turning. (the front would turn faster than the rear..)
So, it lets the front turn faster, to avoid wheel hopping and binding.
The problem with that, is that if you get in the mud, or ice, if one axle loses traction, that is the axle that will get all the power, and you'd just sit there. That's why there is the LOCK position.
When you shift it into a LOCK position, you cancel that differential action, and the front and rear are locked together. Both axles gets the same power, no matter what. Turn on dry pavement, the driveline is going to bind.
clear as mud? Merry Christmas man