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I spent quite few months on transfer case and wheel sensors.
I do not think you need a transfer case.
I would (I promise I won’t start with battery)
1- Set up INPA (or ISTA+) this is a must for you to work on your BMW.
2-Scan the car with INPA or ISTA and get the codes.
3- Print the codes, erase them, ensure battery is fully charged, drive it, scan it again. Then you have some real material to work on.
4- Skip the unrelated codes for now. But don’t be oblivious about them!
5- If you see any faults codes about wheel sensor, check them. Wheel bearing would be your fix.
6-if you see any fault codes with “VTG servomotor, internal error, voltage “ words, you might have a battery and or battery registration issue! Sounds absurd, but it is real!!! Inspect your battery and registration status and go from there. That would be your fix.
Now if you don’t have INPA or ISTA yet, you can use a simple voltmeter and inspect wheel sensors manually!
I posted that procedure on bimmerfest in one of my posts. Same username. If you have difficulties, I’ll find it and post it here when on my laptop.
Don’t freak out ! Don’t rush into transfer case rebuilding or replacing.
Quick tip: inpa and the kdcan cable on ebay or amazon for ~$20. You need a PC laptop.
Ista+ on other bmw forums!
Good luck
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