I'll ditto Christ on the above.
I have not had any TCC slippage as far as I can tell. If it slipped, my rpm would race up a bit or a lot. Nada. I'm not drag racing here, but hypermiling so normally the load is low anyhow.
It still shifts fine lockup or not. I have noticed it shifts at a decent point when I use more throttle but too soon if I am light on the throttle, hence the "manual" shifting.
I should point out that TCC lockup switches are used in trucks towing heavy loads to save the transmission from overheating and to increase FE on the highway.
I have merged onto the highway and that is much better with the lockup engaged AFAIC. If the TCC is not slipping it can't possibly be damaging anything. The whole torque converter would have to come apart. Not likely if it does not come apart under any other loads. It acts on the far outer edge of the TC where the mechanical advantage is the highest so load is lowest. If the clutch friction material wears off then I would have to replace the TC but since there is roughly as much slippage as stock when it engages it should be just fine. I'm willing to take the risk which I think is very small.
I have increased fluid pressure by adjusting the throttle kick down which should help keep it locked up nice and tight.
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I was also under the impression that the TCC only unlocks under load to increase engine RPMs, effectively providing more power to the transmission. I'm fairly certain the TCC can hold at fairly close to max output, but it's not like we're accelerating at WOT all the time.
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Yup. I believe it's a driveability / power issue. Most people want/expect the torque right now and care less about FE but we like the low rpm, high throttle angles.