The engagement is strictly mechanical and the light is controlled by a switch on top of the transfer case itself. You wouldn't notice much if you only shift into 4Hi for a short period of time but you would once you drove further or started making turns which will cause the 4x4 system to start binding up if you're driving on pavement. The 4x4 system used in the Wrangler is only suitable for slippery surfaces like offroad, dirt roads, or roads totally covered in snow or ice. Don't use it on dry pavement or pavement that is only wet from rain, the excessive traction on such surfaces will cause the transfer case to start binding which will make the steering jerky and tires try to slip. This is because when you're in 4x4, the front axle is mechanically locked to the rear axle so they are prevented from turning at the different speeds required when making even minor turns.