It dampens vibrations from the t-case. That's it, really. That's why it's just a big heavy hunk of metal.
I wouldn't worry too much if you don't have one, but you will get a little more vibration without it. That might tend to loosen up an odd nut or bolt over time.
It sucks up some of the vibration when the tcase motor shifts the transfer case into 4Hi or 4Lo. The vibration is much more noticeable when shifting into 4Lo.
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