The 203 came with full time hubs, so engaged all the time, like a tractor. 203 had differentials in them. I have maybe 20 of them laying around here right now. Direct coupled and independent configurations. My brothers tractor has high and low range. Rabbit and turtle switch on dash, in addition to high low shifter. 203 shifter positions, low lock, neutral, 2wd high, 4x lock. The rear output of a 203 has a differential in it. A 205:does not. Shift positions low, neutral, 2 hi, 4 hi.
A 203 allows front output and rear output to turn at different speeds because of the differential in the transfer case. So, a 203 system had front differential, mid differential, rear differential. Basically the same as my Subaru Impreza which was all wheel drive, when the 203:was in 2 wd position. I couldn't shift the Subaru T case, it had a viscous coupler in T case, and all was connected, all the time.