In 2H the centre of the front diff disconnects.

One front wheel drives its cv/axle and centre of the diff, the other front wheel drives its cv/axle,ring and pinion of the front diff and front drive shaft.
The drive shaft is disconected in the transfer case from the rest of the drive train.

All the mechanical parts still spin, the diference being that the diff itself is disengaed so that there is no connection between the front left and right wheels. If this didnt happen the steering feels very "funny" while cornering in 2H

The only way to stop the whole assembly from spinning is to install manual hubs