Towing an AWD vehicle with one or both axles rolling, without being in neutral, could cause significant damage depending on how the vehicle is designed. Some vehicles are very sensitive and damage can occur even if the tire tread depth is different between tires by more than two or three 32nds.

Damage can occur to the engine, transmission, differential, and/or power transfer unit. The issue is that those parts will be accelerated to a high rpm unintentionally, and that can cause damage when there are computer (or human) controlled valves or other parts that would normally be opened or closed during operation but since the vehicle is being towed, those parts are in the wrong position. If it is a manual tranmsission, clutch and flywheel damage can also occur.

The most common damage I have seen from roll towing an AWD car is a cracked/broken power transfer unit case and cracked/broken transmission case. I have also seen twised driveshaft tubes, burned automatic transmission clutches/steels, and a differential pinion that became powder.

If you’re questioning the safety or condition of the vehicle, take it to a professional to get it inspected.