In a Series Land Rover, the drive is normally just to the back wheels.  In high range, you can push the yellow knob down and you have connected the drive to the front wheels as well.
When you pull the red knob back to engage low range, it also connects the front drive, so the yellow knob pops up.  I have met people who thought that meant you could not have 4WD in low range.  The opposite is true.  You have to have 4WD if you are in low range.
A Defender and a number of other less important Land Rovers 

 have drive going to the front and the back all the time.  The differences in speed between the front and back is handled by a small differential in the transfer case that does the same job that the front and rear diffs do in coping with the differences in wheel speed across the axle when you go around a corner.
The centre diff can be locked so that the setup is then like the older Series Land Rovers. It can be left unlocked and as people have explained, that can be very useful for low speed manoeuvring, especially with heavy loads.  The front and rear wheels are free to turn at different speeds if they want to.  So there is no transmission wind up.
If you were thinking of a Series Land Rover, then your concern would have been valid, since engaging low range also engages 4WD with the front and back axles locked together. (Unless you have freewheeling hubs.)
So the short answer is, because there is a differential in the transfer case.
Does that make sense?
Bookmarks