The 4 vacuum lines on the
transfer case switch are:
Vacuum in
Vent to engine compartment
2 lines to front axle
I'm thinking you have a vacuum source on the vent line, which along with the original vacuum source line is giving constant vacuum to both lines to the front axle.
I would find an XJ that hasn't been touched and compare your vacuum line setup to it, or have somebody on here tell you which color lines go where.