not sure I would call it garbage, it is a compromise at best. no illusions that it will not grip or perform as well as a true limited slip diff. But I would see this an economical step up from an open diff. Yes, it will wear out faster. No, it will not work as well as a full limited slip diff. It would be nice to spend over $1000 to get a proper set up, spend perhaps another $1000 to have it custom fit to the small Tercel4wd rear diff, or spend even more adapting a larger rear axle assembly to fit in the Tercel4wd. Which might be called for if you are running 160-200 hp in your Tercel (which means at least an engine swap), and likely with that much power, and a "real" limited slip, you would bundle up your transmission in a few milliseconds.
So if you are running around 100 hp, the stock drive line, this half step (very) limited slip diff seems like a good options. If you are running a big powerful engine, and you adapt a stronger transmission, and a bigger rear axle, than a full proper limited slip would be called for.
I have not heard any issues with reliability of these retrofit LSD kits, only that they do not grip as well as a regular full LSD. You get what you pay for, it would cost you about ten to twenty times more to adapt a full LSD rear diff to the Tercel4wd. Even if you improve traction 10 percent for a few hundred dollars, it would be worth it.
However, If you risk trashing the rear diff when you are using one of these kits, than it would be a serious concern (and than I would call it garbage too, in fact, worse than useless). I did a search on all the car forums about this kit in the past, but could not find any instances of complete failure. the only complaint was it was not as good as a full LSD, but well worth money.
what would be really great if there was some simple way, retrofit or kit or something, to completely lock out the rear diff for slippery surfaces. and unlock it for hard surface roads.
'87 Tercel 4wd SR5 (current engine swap project)
'84 Tercel 4wd (daily driver, with on going mods)
'92 Mazda MPV 4wd (wife's daily driver)
'85 Tercel 4wd DLX auto(daughter's daily driver)
'01 Honda Civic (other daughter's daily driver)