2003 X3 - Replaced transfer case gear, still 3 lights and "actuation error"

[Corellian Corvette]

Before spending money on rebuilt transfer case. Bought my parents a nice 2006 X3 with the trifecta lights. Assumed it was a bad gear in the actuator motor since the car was otherwise in fine shape.

Pulled the motor today and the gear was actually fine. Replaced it anyway.

I wanted to test the motor, so I hooked up my Launch and went the Actuation Tests to try and spin the motor. I connected the electrical connections but didn't put the motor back on the vehicle - left it hanging. Did the test, and the gear spun for a second then the Launch said "actuation failure"

I thought the problem might be that the motor needs to be connected to the transfer case itself. I reconnected the motor, and ran the tests again "actuation failure"

The Launch also had a "recalibrate transfer case motor" procedure (start the car, idle, and in Park) and I tried the calibration test - once again "actuation failure"

So now I'm stumped. The motor spun for a very short time. After that, every other test I got the same failure error.

So my question is - is there a good process to determine if the problem really is the transfer case? Or if perhaps the motor itself failed.

Thoughts?