The front propshaft should turn all the time, I believe, but I'm not quite sure about that in 2wd. It won't turn while the truck's not in motion. The front diff is engaged and disengaged with the front diff actuator that's on the diff.
In AUTO the transfer case engages when rear wheel spin is detected, and spins the front prop shaft -- there's a speed sensor for it -- at about the same speed as the rear propshaft so that all the AUTO function has to do is actuate the front diff when commanded by the ATCM. It takes a second or two to do the switch into 4wd AUTO. In 4wd everything turns all the time (obviously).
Can you put your TC in neutral? Wonder if it makes the same sound when it's in Neutral? (Be sure to set parking brake and chock the wheels.)
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