The output shaft of the front housing on a Syncro transaxle (onto which the driveshaft is bolted) registers to the pinion shaft inside the transaxle via a hole bored in the former and a mating shaft feature on the latter. This is a steel-to-steel connection. Around this are splines on both shafts, over which a steel sleeve with mating splines is installed, thereby permanently coupling the two shafts. This is how the driveshaft flanges at the front of all transaxles installed on all Syncros sold in the USA were coupled to the pinion shaft inside.
By modifying the guts of the front housing in such a way that the aforementioned sleeve could be moved on demand, the housing is converted to a driveshaft decoupler. However, whether or not the sleeve couples the two shafts together or is moved out of the way so the two shafts are decoupled, under all normal circumstances these two shafts still move at almost the same speed. Thus, the steel-on-steel mating area just goes around and around for the ride: no significant, relative motion between the two shafts occurs.
When negotiating a tight turn, the front wheels rotate at a slightly different rate than the rear, and there is relative and very slight motion between these two shafts. The operative word here is SLIGHT. Because of this fact, the early-production decouplers we sold (built by another supplier) did not have a bushing in this area. Many hundreds of these were sold without issue.
Under a sustained, high-differential speed between the two shafts, things can go badly. For example, towing the vehicle on the rear wheels or getting stuck in sand or mud with the with the driveshaft decoupled: the rear wheels spin and the fronts do not. We experienced exactly that while running a Syncro on a rear-wheel-only chassis dyno. The two shafts welded themselves together, and both were ruined. We contacted the manufacturer and asked if they would add a bushing, which they did. When we started making our own decouplers, every single one was fitted with a bushing in the shaft.
However, this was done with the understanding that the purpose of the driveshaft decoupler remained the same. That is: to eliminate binding during tight maneuvering on high-traction surfaces like dry pavement. It was not designed to sustain continuous differential shaft speeds. Indeed, even the bushed shafts fail if subjected to that particular condition. But, they usually do not ruin either of the shafts in doing so—the bushing usually takes the brunt of it. In essence, the addition of the bushing was like adding a fuse to the system—to prevent total meltdown if the decoupler was asked to do something it was not designed to do.
For more information on the decoupler system, we recommend these two articles: