When you shift one of these trucks into 4wd, a actuator moves in, and pushes a collar together in the front diff.
When this happens, instead of all power going to the open "unlocked" side because that's the side that's capable of handling the least torque, power now flows through the spider gears, out to the CV's, and to whichever tire is capable of holding the least torque.
When you shift to 2wd, the actuator retracts, one side is unlocked and freewheels. The other is still attached and spins along.
So, if you had an auto locker, like a Detroit, it wouldn't lock, because no power was being applied to it, and it would work peachy. But, if you have a solid diff, that one tire is connected to the drivetrain at all times, and that makes for some squirrelly handling.
The reason they quit making anything for the 8.25, is the housing is **** and explodes. Even the 9.25 is much beefier,but there's no real to swap it in without basically engineering the front of a 2500 onto your 1500.
Basically, the 1500 stuff, is about good enough to get you down an icy road, or out to the fishing spot, and that's it. There's no aftermaket for it because it's not suited to extreme stuff, and the market isn't there anyway.