son of a ......bird....
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Yep, switching modes on the transfer case will reset the traction control to default. Locking or unlocking the rear will not reset your current mode settings. You're going to want to put her in Off Road Mode (can only be done at 5mph or less) and long press (10ish seconds) the AdvanceTrac button (can only work if at 35mph or less). Doing this in 2h or 4h, rear locked or not will command it to use off road shift points and the off road throttle map, as well as totally disable the AdvanceTrac features. It will also put the ABS system into off road mode (not totally turned off, but much less sensitive. To totally turn it off, you need to pull the ABS fuse).
If you're in off road mode, that locker should stay locked up to 100mph.