On our '06 4.7, when placed in 4-lo I have traction control and abs lights come on. It will allow me to slide a bit, and get some wheel spin (I played around on an iced over parking lot), but will kick in and still exert some control if I get to much slipping/spinning.
With the jeep in 4-lo I can also press and hold the ESP button until it shows ESP OFF. At this point in 4-lo I can stomp on it and it will spin all 4 tires until I let off the gas, and will not assist or help with sliding/slipping (once again tested on an iced over parking lot)--I usually had to let off the gas to not hit something or to control the sideways movement.
silver '06 4.7l, leather, no sway bars, BFG A/T with MTR tread (TreadWright) 265/70/17, 1.5" spider trax, get lost 4x4 front bumper and rock sliders, custom lift (OME front springs with spacers, 2.25 RR in rear)