I would agree with most of that but change the terminology sligtly. To my thinking if a system is "Full time 4wd" then, as the name implies, there is no option of two wheel drive. I would call your option number 2 "Part time 4wd with automatic engagement" and option 3 would be "Full time 4wd". With the trucks I am familiar with a single stick part-time transfer case would have 4 options: 4 low, neutral, 2 high, and 4 high. The full-time 'case would offer low lock, neutral, high, and high lock. Low and high lock positions lock up the center differential in the transfer case, making it just like part-time 4wd, where the high position leaves the differential unlocked but the vehicle is still in four wheel drive.