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Engine troubles

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The slipper clutch (the nut on the spur) is considered by many to be a traction control adjustment, but it's more for protecting the drive train, by giving the transmission a "give" point.

Now, as for the diff slipping; that's not a good thing. Any time the diff slips, it causes the diff rings to rub against the diff balls, potentially creating flat spots on the balls, and wearing grooves in the rings.

The slippers' function, properly adjusted, is to provide slip, so the diff won't slip under hard acceleration.
 
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