The TCPS doesn't control anything, it only provides information to modules. It informs the BCM so it can illuminate the appropriate instrument cluster display message (4X4, 4X4 Low). The ECM changes throttle response. The TCM changes shift points in low range. The FDCM allows locker function in low range. I'm not sure which module locks the CAD.
On a 3rd or 4th gen, for the 4X4 system to quit working you would have to have a hard part failure (linkage, gears, chain, shafts, U-joints). If all that is good you actually have a 4X3, thanks to the LS rear axle. If all of the electronics are working properly, you can engage the lockers and have a true 4X4. You could rip out all the wheel speed sensors and still have a 4X4.
On the 4.5 gen with the CAD front axle that's electronically controlled, it's anybodies guess. Stay tuned.
For my money, I would rather have a solid front axle with old school locking hubs (free spin kit).