All of the teaching faculty in the Computer Science department, if I remember correctly, were on that track (or had been and now had the guaranteed employment), and were definitely a big part of the departmental life. When the department's accreditation was renewed, they were highlighted as a particular strength of the department: which I think would be really rare for the typical adjunct teaching model as I've heard it described.
That being said, I did see the adjunct/research faculty caste system develop elsewhere at the university, although I don't know what the details were RE: expectation of continued employment/etc. I think it is possible to avoid, but requires a concerted effort by the department as a whole to avoid, and that requires it being something enough people in the department want.