You're missing that the speedo drive can't see what's happen upstream of it, only downstream. For your example to be correct, the speedo would read differently in each gear.
The speedo is calibrated for rear end ratio and tire diameter. If you put reduction gears in the transfer case, the engine revs to achieve the same transfer output speed increase. If the car was running stock tyres and axle ratio, the speedo would still read correctly, the engine just has to rev higher to make the output shaft of the transfer spin at the same speed it did before.
If I change gear from 5th to 4th, revs jump up at the same output shaft speed, just like fitting transfer reduction gears, the speedo has no idea this has happened either.
So say now I put 31" tires on. These are bigger so for the same transfer output speed, the car travels 16% faster. The speed reads 50 MPH but the car is doing 58mph. I can gear the transfer case however I like, or put the car in whatever gear, when the speedo is reading 50MPH, the car is still actually going 58.
Transfer gears correct gearing with bigger tires - they do this by increasing engine speed at a given road speed, but the speedo can't see this. The speedo still thinks the car has 26" tires on it and a 3.7 rear end. Changing the axle ratio will effect the speedo reading, as will changing tyre size. They're the only two things that can change it.