Complete Stop, shift to 2wd, drive, making sure it engages, then shift into I4wd on the fly. Dash should say I4wd,
Then sift out of I4wd to 2wd on the fly, dash should say 2wd.
Then stop completely and shift into turf and 2wd should be gone from the dash.
The operative is the "stop" before shifting in and out of 2wd. Making sure you have your rear differential engaging-disengaging, correctly and not making any noise.
That's how I know what my LE is doing.
My rear differential cables needed adjustment when new. Likely yours does too.
As JE said, they do make some noise from other normal stuff.
JMO