I think you will find that is electronic stability control. Traction control is what stops you ripping skids, among other things. It also reduces engine power in an effort to regain traction. Obviously this all occurs at low speed, reducing the risk of losing control before the vehicle gets too far gone.
Yes, traction control is turned off in low range, but I do recall others on here mentioning an "electronic diff lock" which was the ecu detecting wheel spin when in low range and applying brakes to that wheel in an effort to keep the vehicle moving. How well it works I couldn't say, as I also have a D22 with a LSD in the back...
As for diff labelling, if it is LSD, it should have a sticker saying use LSD oil only on the housing near the fill plug.