As a person who was checking out his new transfer case this morning, I have to agree with most. And, it works as my older case did (just not as noisy when braking

).
If you switch from 4lo lock to 4 hi normal, when sitting still and in neutral, it will take a few seconds to be totally unlocked (as Bebe stated). However, disengaging while in neutral and rolling at about 2 mph, it should unlock faster.
This is normal under most conditions and is primarily due to the teeth in the input shaft meshing with the planetary gears. If you are slightly moving, the gears unmesh quicker, if not moving they are meshed together and take a few feet to unmesh. That is one of the clunks you here when engaging.
If they do not disengage, it is usually due to the encoder motor, and you can remove the motor and manually turn the shift cam that the motor is turning.
If the motor is not the fault, you got t/case problems.
Early models did have some TCCM and encoder motor problems, but thanks to BW and GM engineering, these problems have been reduced notably. Not saying one could not break, but chances have been cut significantly.
YOU WILL get the binding of the front wheels if driving on pavement in 4lo or hi lock, even with an open front diff, until the case totally unlocks from 4lo lock. From the owner's manual:
Notice: Driving on pavement in Four-Wheel
High Lock or Four Wheel Low Lock for extended
periods may cause premature wear on your vehicle’s
powertrain and tires. Do not drive in Four-Wheel
High Lock or Four-Wheel Low Lock on pavement for
extended periods.
You also have to be in neutral (or have the clutch engaged) to shift into or out of 4 lo lock. The preferred way is to be moving less than 3 miles per hour, but in neutral. If not in neutral, the TCCM will not (or better not allow) a shift into 4lo lock. You should also remain in neutral until the 4lo lock light stops flashing. I know on mine, if you push the lo lock button, the light flashes and nothing happens.