It had nothing to do with adjusting or trimming anything (in a stock housing anyway), and you are supposed to leave it I in if you run tapered bearings.
In the 8 3/4, outside- wheel cornering load is carried by the opposite wheel bearing. There's a button in the stock diff for this purpose. That slug allows the trutrac to transfer cornering load in similar fashion, THROUGH the axles and diff.
This was covered in mopar action about the time the trutrac came out. Iirc, Rick and crew had to make their own slug because their diff didn't come with one. This might have been the bold beeper Road Runner?