Update: truck ended up clearing the code on its own, dealership says they showed history of it throwing a code but can’t do anything since it is functioning. They told me to keep transfer case and 4wd lubricated once a month or so and bring it back immediately with any further issues. I have since made sure to cycle through 4wd modes weekly and have had no issues.
I have a 2022 Silverado 3500 and have had this issue as well. I was driving home in icy conditions with the truck in 4wd auto. The service 4wd light came on along with the orange indicator and parking brake applying itself. The truck felt like there was a power issue in the front end and would decelerate rapidly when not on the gas as if it was in full time 4wd. The truck has only 3000 miles on it. I scheduled a service appointment for 1/7/22. I was able to get the truck into 2wd by pressing the ignition to on and pressing the 2wd button and then pressing 2wd as the truck was starting. It still has the service 4wd light and orange indicator 2wd. This is very disappointing and seems to be an issue with the “upgraded” 2 speed transfer case. I will update if I can get a fix or definite answers in a couple days.