that is a magnetically controlled clutch pack. It is similar to a limited slip differential. It is used in kia's AWD vehicles. It looks like a Jtekt ITCC active AWD unit.
here is their brochure and you can see a cutaway of it half way down with the clutch pack.
yours has a different casing but should be very similar.
and the soreno uses them so it's a safe bet the sportage has them too. jteckt in soreno
The way this works is one side connects to either the drive line or the diff and the other side connects to the opposite (not sure if it's the "inner" or "outer" that connects to the diff and the driveline but could be either or and it would depend on model. It will work the same in either configuration). there is a powerful solenoid that can compress a pack of clutches (similar to how your air conditioning pump works). The amount of pressure is controlled by the car's computer to give more or less power to the rear wheels or none at all for fuel savings.
If I were a betting person I would say the end with the splines would connect to the diff and the flat side with the bolt holes would connect to the drive shaft then there would be a retaining plate to keep it splined to the rear diff. This would make it easily serviced without needing to disassemble the diff to get at those bolts on the flat side. but this is a guess.