Correct me if I'm wrong, but this looks very similar to the Technokats' 2002-2004 shifting technique. If it is...
This is a shift-on-the-fly system that uses two free-spinning gears (The outer two on the right of this pic) with some sort of mechanism that will engage with that center "dog" (between the two outer gears on the right). This center dog is connected to the shaft so that the shaft cannot spin w/out the dog spinning, and vise-versa. Hi/Lo gear is determined by which gear the dog is engaged in. I hope that this answers your question.
check this out for drawings of and other info on our 2003 gearbox -->
http://technokats.org/archive.htm