2wd or Auto is fine on street for towing
4wd only offroad when traction needed
I will say that I leave mine in 2wd 99% of the time. That is to reduce wear and tear on components. In nasty weather I put it into AWD. And immediately put back into 2wd afterwards.
in AWD mode the front axle and hubs are engaged. The t-case is partially engaged as well. Lot of moving components spinning. So if you don't need it, put into 2wd so everything can take a rest.