No, it isn't bogus. 1996 was the first year of the new transfer case output design. Even a factory Up Country option, which is a 1" lift, causes excessive vibrations on that drive train. This is a documented fact, and the factory has released a TSB calling for a transfer case drop on the 96 and newer XJs with Up Country to try to alleviate the vibes. Service writer at my dealership had that installed on his wife's 99 with Up Country -- he said it eliminated 80% to 90% of the vibrations.
I stand by my statement. '96 and newer, pretty much any lift requires a SYE. A 4" to 5" lift definitely will need a SYE.