The wheel bearings are tapered rollers. That nut sets the preload on those bearings, through the axles and the block in the diff., on the spider gear shaft. The adjuster should be tightened to zero end play is seen at the axles (Best to use a dial indicator, but I have faked it with good results) then back it off .013-.023, or four notches on the lock system.
If your rear is a limited-slip unit, be sure the little thrust buttons didn't drop out into the housing when you pulled the axle! They aren't supposed to, but sometimes the roll pin that holds them together doesn't do its job. If the button does come out, there's no way to get any preload. The cure is to pull the center section and refit the buttons.