Exactly, the LOC is for basically locking the driveshafts so to speak, so you're guarenteed at least 2wd, 1 in front, 1 in rear. Now if you have lockers in your front and rear diffs, then yes, you'd have a true 4 wheel drive. Some guys just get a locker in the rear, some just get a locker or weld the spiders in the front which I don't suggest, Some get lockers in both, and some get locker in the rear and limited slip in the front. I'd say locker in the rear and lsd in the front is best of those who still want driveability on the street in light snow and those who don't want to feel or fight with alot of torque steer in the front end. I"ve got an air locker for my front my diff that I acquired, and I"m not going to pass up using it, so I'll use that instead of the lad. I'll leave it off on the streets, and when off road, I'll hit the swtich and lock it up and have true 4x4. So that's the plan anyway. You can spend a fortune getting your axles set up the way you want.
But, you'll get some guys talking down your full time system, but it's really not all that bad IMO. But, it is important to understand how the system works. For example if you break your front axle or driveshaft, then in any other Tcase, you'd go to 2 hi and go home. IN your case, in 4Hi, you won't move since the differentiation transfer case is going to find the wheel with the broken axle as least traction and run that axle that can't move obviously because of a broken part. So to get home, you'll need to 4HI Loc it so the Tcase will drive your back axle. but keep in mind, it's also driving your front axle too, so whatever the case may be, you might have to pull that front driveshaft or tear up even more stuff.