Tow/haul mode is what keeps the tranny from hunting between 4th and 3rd. Ive owned many TH700R4 and 4L60E and built many more and I can tell you that if you dont have a corvette servo installed or equivalent then dont even think about towing in 4th and even then I probably would not unless maybe on completely flat land.
What typically kills our transmissions is Towing in 4th, Dirty worn out fluid and Heat. During the back and forth hunting between 4th and 3rd alot of heat is generated and excessive slippage of the 2-4 band. This over time wears the band out and it loses excessive friction material (think just like a like a clutch plate). Next thing you know you no longer have 2nd or 4th. Thats a problem especially when you are towing a load. I once drove a 99 GMC Sierra Z71 (5.7L/4L60E) and the tranny lost 2 and 4 around 120K miles and I drove this back and forth to work at the time a 200 miles roundtrip each day until I could get time to get it on a friends lift and money/parts together to do a full rebuild. That Sierra is still here today with 275k on the odometer still running on that rebuild I did back in 2006. I towed my 5400lb 32ft HRC Aluma Lite travel trailer with that truck (religiously in 3rd gear on hilly roads) often many hundreds of miles, took off road at the very least hunting season every year, pulled many people out of impossible places during the winter. The Illinois State Police had to have been mesmerized. That Sierra was a beast and still would be if the engine wasnt so tired. The truck was all stock except for the optional tires that came on her factory and the internals to the tranny. I should just sell it before it rusts to the ground but she has been a very good truck. Somone else needs to blow her up, not me.
