[Gray Fox 19]

Well if you don't have enough fluid in the transfer case it will not be able to change.
One of your posts mentioned you had a 2015 Canyon. That fluid is 7 to 8 years old.
Could be a big part of the issue

The other possibility in my mind, could be a bad transfer case actuator motor and I don't know how many there are on these trucks.

My Jeep Commander has 2 actuator motors on the transfer case, an upper & a lower and I had to replace the lower transfer case actuator motor, due to not being able to shift into 4-LOW (was getting the Service 4WD System MIL).

And 7-8 year old transfer case fluid, is definitely not a good thing.

 

[Gray Fox 19]

Here is a website I frequently use to look up DTC's and I can't even find C038D;

Generic OBD-II C Chassis Trouble Codes