Unless I am mistaken, on a YJ the rear D35 is a non-C-clip rear axle like 90 & older XJs had. The axle shafts "bolt onto" the rear axle through a bearing inside the drums. I have had that bearing fail before & the shaft/tire go flying down the road past me - NOT FUN.
But, if you've got a lot of play in the pinion then you probably have more problems than that. A little bit of rotational play is fine, but in-out movement is bad. Pull the cover & check for metal shavings, etc, then look around for where your play is at.
Check your tcase fluid level, drain & refill. Also drain & refill the tranny's gear oil. Check your u-joints with a screwdriver & if there's any play at all in them, then they're bad.
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