I think this system is a lot like that in our CR-V. The "transfer case" at the transmission is nothing more than a 90-degree hypoid gear set which spins the propeller shaft at transmission output speed. The rear wheels drive the coupling unit, which is bolted to the rear differential assembly. If no difference in speed, there is no clutched coupling. With a difference in speed, the coupling will begin to, well, couple, and power will be transferred to the rear differential.
The propeller shaft is required for rear power transfer only. Removing it will leave the rear unit in a constant state of just "rolling along", which shouldn't hurt it, and the transmission and transfer case will likely never know the difference either.