No, it's not "bad" per se. It's just a different design. Any "shift on the fly at any speed" 4WD systems (by any manufacturer) have permanantly engaged hubs. Any "shift on the fly at minimal speed" and or stopped, have locking hubs, whether they're auto hubs or manual hubs.

A permanent hub like the 05+ models only disengages the front drivetrain at the t-case, whereas the previous design disengaged at the t-case AND at the wheel.