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During a slippage, inside the torque converter, a mechanical coupling between the engine and the transmission is not achieved. I do not know if this will cause quicker wear and tear in there. However, if ATF temperature is the main concern then it is possible that the system cools off the fluid well, compensating temperature rise due to slippage. This may explain why one Volvo owner drove 90k miles, using D3 around the city, and not have any issue, however, yet.
High ATF temperature can be addressed via replacing it more often (every 10k miles or less). I do not know if too much ATF replacement can cause any harm. However, AllDAta.com service manual specifically mentions that it should be replaced only if high temperature is recorded or under extensive towing or burnt odor / discoloration of the ATF occurs. I do not know why.
I may use D3 during short distances (10 or 15 minutes drives and under 3000 engine rpm). I hope that is OK.
Ronjon
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