This is correct according to the schematics, and a switch (in the schematic I posted for an early 7060 truck) would tell the PCM when the T-case is in low range so it would shift correctly. I've never seen a 4L80/205 combo out of a 91 square with 3 speed sensors, the couple I've seen had an extension harness to the VSS in the tailshaft of the transfer case.
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