I can lay your fears to rest about doing the TSB. I heard the same thing about the TSB changing the transfer case (center-differential) to "open" type. I asked our mutual feathered friend about this last year in chat. Here is the Q & A:
<Scott> I have a love affair going with my AWD Mag RT. But just had the TSB that replaces the friction plate with a thicker spacer. The effect is making the xfer case more like a open differential. It's hard not to feel that I have lost some functionality of the AWD, is that the case?
<Scott> The nature of the AWD problem is a bit of a surprise, as I thought it was based on a proven Benz design.
<fnkychkn> not the case at all. the friction plate was just to absorb vibration. not enough surface area to effectively transfer torque.
<Scott> I have been trying to test my AWD on wet roads since the TSB to see if it behaves differently, but it has been dry or I couldn't get away what it is raining.
<fnkychkn> i've tried. no noticeable difference straight line or turning.
I've driven 20-30k miles since the TSB and continue to be impressed with the AWD performance in rain, snow, and ice. I continually marvel at how fast I can accelerate when turning on slippery surfaces.
All the reports that I've heard about the "dreaded shuddddddder when turning" is that once it starts it becomes progressively worse. So you may not have a choice about whether or not to do the TSB.
“Open Differential” – My understanding is all LX differentials are open, whether rear, front, or center. (We could verify this with an exploded drawing of the transfer case.) Traction control uses individual brakes to control wheel spin and ensure wheels with the most traction still have high torque.
When the traction control is triggered, I think we nearly have the equal of limited-slip differentials.
The “Loss of traction” and “Traction-adding devices” sections at the following page provide background for those interested. http://en.wikipedia.org/wiki/Differential_%28automotive%29
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