Sounds like you're pretty new to the world of 4wd and I would suggest you read up on how Jeep's (older) 4wd systems work before you pull any 4wd levers... But here's the gist: PT means that the tc locks the f/r drivelines evenly in 4hi mode. Meaning, it should only be used in circumstances with slippery conditions and you don't need the gearing of 4low. I.e. mud/snow/sand, etc. with little hill climbing, etc. No, this isn't an automated 4wd or awd system. And that's the beauty - you have more control + there's less to go wrong. But that also means that you, as the driver, must anticipate driving correctly for the road/off road conditions.
Lastly, since this is a mechanical system, the switch does nothing but illuminate your dash to inform you of the current 4wd position. If you pay attention to the lever's position, you don't need it but in the case that you might forget, then it could be the difference of a blown tc, or not.