Your '96 may be different, but I had a Mystery Switch on a previously owned ''97 3500 and it wouldn't shift down from 4th(OD) to 3rd (Direct)as long as the torque converter was locked. Both the engine and transmission were stock.
It also had 4. 10 gears and I did run it a lot in 3rd with the torque converter locked. No problem other than a lot of engine noise. As long as the torque converter was locked, the transmission temperature never got over 180 degrees, measured in the pan, towing a 31' Hitchhiker with 2 slideouts(21,000 lbs GCVW) all over the western US.
On long steep grades in hot weather in 2nd gear, torque converter unlocked, the transmission temp would get up around 220-230 degrees along with the engine. The engine temp would also get up because of the coolant to transmission fluid cooler on the side of the engine was "dumping" a lot of heat to the coolant. The engine temp was more of a limiting factor than the transmission temp.
Bill