Electric shift motor has 7 wires
2 are for the electric motor, 12v/ground, reversible
5 are for Position Sensors/switches in the main body of the housing
There is 1 Brown(usually) wire on its own for an Electric Clutch, these were used with Auto Hubs so not there on 2001 and up transfer cases
Electric clutch allowed shifting to 4WD, "on the fly", when the front driveshaft/chain drive was at 0 RPMs before Auto Hubs engaged
With Live Axle, or Locked front hubs the front chain drive is always spinning at same RPM as rear so no Clutch needed
2 wire sensor is for speed, VSS up thru 1997, in 1998 this was dropped in all transfer cases(and transmissions)
Ford added VSS in the late 1980's for use with cruise control and Auto trans shifting, and in 1995 for electric speedo/odo set up
You can just cut and then re-connect Brown wire, as said its only needed with Auto Hubs, if you leave manual front Hubs Locked in winter then you can shift to 4WD on the fly and back to 2WD as needed, no need for the clutch