Googled it, found something, but not clear instructions.

Apparently you can mod the duty solenoid C circuit just by adding a simple switch to the wire. But since I don't have a repair manual that has a wiring diagram for automatic gearbox, I can't find the right wire.

So, where can I locate it, and what color is the wire?

I have a LHD -91 EJ18 Legacy, North European version. Don't know if the wire color codes are the same in US version...

 

try to find the FSM or wiring diagram online.  for US versions you can find nearly any one online for free.  you might even just start there and see if your EU info is identical to US, shouldn't take long to tell if the wires are the same colors/locations. 

I've accessed the wiring at the transmission harness in the engine bay or at the TCU under the dash.

maybe a wiring guru could explain a simple mechanical way to find it, for example (these are for illustration/starting points only):
1.  if the Duty C solenoid has a distinct resistance then just check all the wires until you find one within the range of the Duty C solenoid. 

2. can you hear the Duty C click when it's activated?    if so:

a. find the ground wire - easily test each wire while the car is "on" and find the trans ground wire. 

b. disconnect the trans connector - ground the ground wire, and then apply 12 volts to each wire and listen for the Duty C to activate.

I found a manual that has wiring diagrams etc.

Apparently the duty solenoid C resistance should be 12 ohms. 
And when you apply 12 volts to it, it's fully open and FWD. 0 volts or disconnected full 4wd

Exactly   Cutting power to it “locks” the 4WD.  

Looking at that FSM find the wiring pinout for the trans connector or the TCU and look for the duty c wire.  Cut it and it’s “locked” install the most basic “on/off” switch to properly open and close that circuit. 

On later models the TCU light will flash 16 times after every time is starts with the switch in “locked” position. Just happens once due to you flipping the switch. Ignore it or build a fancy circuit to mimmick the resistance the TCU needs to be happy. Since that is pointless I’ve never done it. 

Found the right wire. Manual said it would be white-black, but I had black-yellow. Figured this by looking at the connector, and I wasn't surprised that the color codes won't match to the Northern-Europe versions