The contact plate and contacts "tell" the 4x4 controller what position the transfer case's shift rod is in, 2H, 4H or 4L
When key is on the controller "knows" the position
If it doesn't then 4WD lights on dash will flash
The contacts also run the dash 4WD lights, i.e. the 4high light won't come on until the shift motor has moved and the contacts show 4H
You can turn the key off then change selector to 4high(was in 2WD) then turn the key on again, and 4x4 controller will see Selector has been changed and will then move transfer case to 4H
Pin 8 wire(top) is the reference wire, the other 4 wires are either connected to it(short), or not connected to it(open)
And FYI "4H-4L" is Neutral
4x4 controller activates shift motor and "watches" as the contacts open and close then stops the shift motor when contacts Match correct position
If at anytime the contacts are not changing after shift motor is activated 4x4 controller shuts off shift motor and flashes 4WD lights
Yes, they do make custom conversion kit, but expensive, $895:
https://www.behemothdrivetrain.com/products/borg-warner-electric-to-manual-shift-conversion-kit
Problem is you have rotate the shift rod 270deg, 2H to 4L and then back, so mechanically its not an easy conversion