Automotive gear oil can be broadly divided into Manual & Automatic Transmission Oil and Differential    
Gear Oil. LSD gear oil is a specialized sub-type of the differential gear oil.

[Gear Oil & Required Performance]

(1) MTF (Manual Transmission Fluid)

As a manual automotive transmission employs spur gears associated with relatively mild operating conditions (Helical Gear* is used in real applications) and operates with relatively minor intensity at high speed/low loading, API GL-3 or 4 as specified in the API Gear Oil classification is typically used.

(2) Differential Gear Oil

Automotive differential uses hypoid gears exposed to severe operating conditions and it is applied with impact load in driving. Therefore,  API GL-4 or 5 single-grade gear oil designed to maintain high viscosity at extreme pressure is used.

(3) What is LSD gear oil?

Therefore, LSD gear oil is required to perform in a manner equal to or better than differential gear oil, with friction-resistance.

That is why API Category GL-5  extreme pressure-resistant oil featuring high viscosity comparable to differential gear oil is used, with FM (friction modifier) being used as additive.

In general, friction modifier delivers its required performance when LSD is in operation and prevents shattering