It's a problem if the sensor is faulty and giving incorrect readings. I have a tough time believing that the trans can have fluid-temperature related problems while the sensor is showing "175 degrees".
It might be a problem if the sensor isn't reading the temp of the fluid in the pan. The Old Wisdom about fluid temperature assumes that the temperature reading is from the pan, not the torque converter, or somewhere buried in the line-pressure circuit.
Actually, Shurkey, it doesn't do that at all...the temp reads 175, but what causes the lack of overdrive is the ECM detects excess slip from the TCC ( because the TCC apply piston is sticking, meaning insufficient pressure to lock the TCC), and sets a DTC (but doesn't light the check engine light), and then disables overdrive.
With a proper scantool, you can see the DTC that's set, P0740.
Edited by Galaxie500XL, 26 September 2017 - 07:43 PM.