If its an automatic with quadratrac, that is the light to show you are in part time 4wd. The quadratrac is a full time 4wd unit, so it basically acts as a differential between the front and rear axles. When you flip the vacuum switch in the glove box, it locks that differential and the 2 axles turn at the same speed. Its basically the same thing as putting your Wrangler in part time 4wd. If its a stick, I assume its the same thing, but I don't know.