Going from memory, the early D2's had a diff lock fitted with the light switch and signal link to the SLABS controller, but the software in the controller didn't know what to do if the diff lock was activated manually (diff lock wasn't officially fitted) so it threw a tantrum. One way around the problem was to cut the diff lock light switch wire, but that wasn't too clever as a few folks then drove around with diff locks engaged.
The later style controller has the software modified so that the difflock can be used and the TC etc still operate.
I've got the diff lock in my 98 build D2, but to be honest I've never needed more than the basic traction control, so never really bothered to look at changing anything.
If you off-road a lot, it's probably worthwhile doing the mod, otherwise don't worry about it.
Peter