What else is on the transfer case indicator? just 4lo? I'm going to guess you have an autotrac 4 wheel drive, which in case means when your right rear tire sense's the slip, all 4 kick in, and then when you no longer need the 4 tires with the same "power" it kicks back into basically 2 wheel.
Or you could have a all-wheel drive, but in that case, you wouldnt have 4 lo. It would just always be in all wheel drive, which is different than 4 wheel drive.
Or you could have a 4 wheel drive jeep thats only in 2 wheel until you put it in 4 wheel.
You might want to read your owners manual
Brandy