After doing a lot of work to install the Posi-Lock in the Jeep YJ. It failed to work right the first time on the trail. I look at what happened and get it removed in preparation to install a new full axle shaft in the Dana 30.
The cable isn't your problem. You could have adjusted it to keep the collar from going over so far. This was user error. I hope you have deep pockets if you make that a solid axle and spend any time on the highway.
The problem with the CAD system is usually the vacuum actuator. There are two better low cost solutions that will allow you to have 4x4, the 4x4 light on your dash will work and no conversion to solid axle. The first one is to modify the actuator by moving the clip on the electric connection side. Move the fork into the engaged position. Replace the C-clip. The fork will push the ring over and lock the axle. The second is slide the ring over into the engaged position and put two hose clamps on the passenger side axle to maintain that position. The upside is that both of these methods are inexpensive, foolproof and eliminate the vacuum actuator. The downside is that the front diff will turn all the time. But that would be what you get with a solid axle...so pick your poison.
It wouldn't pull out because this is a spin lock design knob. aircraft use something similar. when you push in the knob all the way and turn it right it locks it in. when you pull out and turn left it locks it out. though I could mistaken as I do not have your cable in front of me I believe this to be the case.
The one I installed was the original and not a knock off. With some more fiddling I am sure I could have made it reliable but I am very happy I went with the full axle shafts.
I agree it could have been adjusted and that might have worked but I did not want to risk it again and end on the trail with no 4 wheel drive or locker again.