It's explained in depth in your manual, which you can download and search off of the Jeep Owners website.
Traction control works on all four wheels, unless you either turn it off (partially or completely . . . read the manual) or put the Jeep into 4Lo. Even in 4Lo or with the traction control off however, the Jeep's "brake lock differential" still operates to simulate an LSD on the front and rear.
If you have a real LSD in the rear that does its job, the brake lock differential will presumably not be triggered very much. Regardless, it won't hurt the LSD.