Just a curiosity question for me. Also pardon my more lacking mechanical knowledge.
So even if one has an issue, and removes the F10 fuse to go to FWD only, a mechanically failure of the PTU would still cause the danger situation of mobility/power loss on the road?
Based on your reply above and thinking what you are saying through, I think the answer is YES, but wanted to verify specifically.
noted, there's no way to know what's failing inside. However, I/M/O there are two different issues that happen with the Cherokee PTU's;
1. The first is failure of the actuator and/or its electronics. This is the box on top of the PTU. If it stops working for whatever reason, the actuator arm doesn't move the gears to engage the rear wheels.
2. The other issue is mechanical. We've seen posts from cases splitting (pure mechanical faults in the metal/metallurgy) to lack of oil/oil leaking from seals eventually leaving the unit dry and the gears wearing down. Also, there's an issue on certain year/sn PTUs where the input splines can wear down. There's a website where anyone can punch in their VIN to see if their unit was one of those affected.
So, getting back to the question.... I/M/O, if the issue is with the actuator (which yours sounds like since it seems to work fine in FWD mode and you're not reporting an additional issues or made mention of any obvious oil leaks from the PTU etc.) then if it were me, I would be ok just driving it in the FWD mode for now. If the issue were mechanical (you hear grinding, there' engagement problems etc.), then I'd say, 'no' don't drive it. Just a caveat, this is how I would approach it and I'm not suggesting anyone else should follow this (disclaimer). The risk of course is that something could give out at a critical moment (e.g. you're accelerating onto a highway with an 18-wheeler bearing down etc.) so you need to make your own decision.
In the end, if you don't have the cash right now but need the car, say, to get to work then that's a big driver of your decision. At this point it doesn't really matter if the PTU gets worse since it will need to be replaced one day to get the 4WD back.
Another option.... (though it a little risky).... Search this forum regarding this topic. Along with the rear drive module (RDM), there's a strong suspicion that the majority of issues with the 4WD system are failed actuators on the PTU and RDM's. If you have access to a mechanic with a lift, it's possible
to take out the PTU and replace just the actuator box and see if it resolves your 4WD issue. It would be a large cost savings but it's also a gamble of course becuase if it doesn't fix the issue you could be out the cost of labor of doing this (as well as whatever a replacement actuator costs). YMMV.