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there are 3 positions as far as being pushed in / pulled out.
As far as the shaft goes;
push it in all the way, its in gear
pull it all the way out, its in gear
the middle position is neutral, when you have it in the middle position you should be able to spin the shaft with a drift punch clockwise and counterclockwise.
visually, you can check by sliding a clutch disk onto the input shaft, spinning it and confirming there is no movement of the differential with it in what you think is neutral.