This is not a terribly complex device. It consists of a switch that hooks up to the vacuum line that connects to a circuit board. This combination of devices is able to blink the dash light when there is sufficient vacuum available at the diff-lock switch to engage the diff-lock, prior to engagement where the light comes on full.
The primary motivation was one of safety. If the front-diff knob is inadvertently pulled out to engage the front diff-lock (such as a child might do when the van is parked), the first indication to the driver (assuming he doesn't notice that the knob is out) is the front-diff dash light coming on simultaneously with the steering wheel abruptly pulling to the left or right. It will be almost impossible to steer, and if you are on pavement, you will most likely break a front axle or CV joint.
This device provides some diagnostic functions, as well as its primary purpose as a safety warning device. If there is a problem with the vacuum connection between the engine and the diff-lock switch, then there is not enough vacuum to either blink the light or engage the diff-lock (time to check the lines between the engine and the vacuum reservoir up to the dash). If the blinking light doesn't immediately come on, but starts blinking after a bit, and then engages, you likely have a problem with vacuum line on the dis-engage side of the diff-lock unit (between the dash switch and the control unit). If the blinking light comes on but the diff-lock does not engage as it should, then the diff-lock vacuum control unit at the differential should be checked. If neither the blinking light comes on nor the solid light comes on once engaged, then there is likely a bad bulb in the dash. If the blinking light comes on, but it just keeps blinking when the diff-lock has engaged, then there is a problem with the screw-in switch on the differential.
There are multiple configurations for this device. The basic version is a "single (rear)mode kit" for monitoring just the rear diff lock. The "dual mode kit" is for monitoring two operations - most likely rear diff lock and decoupler although if you have a front diff lock it can be used for monitoring any two of these three operations. Should you have all three functions and wish to monitor all three then you would purchase the dual mode kit and then additionally purchase the "add-on kit"