Volvo used the Laycock throughout. The model - up to the very early 70's - was the D type which had a slightly longer OD ratio than the replacement J type. I think there was another model that superseded the J on the very later ODs. In the late 60's my brother drove a '53 Studebaker 3-speed with BW overdrive.
To answer the OP's question. Having run with gear oil will likely not have done any damage to the OD but it will work better with motor oil as has been specified by Volvo ever since they began using the Laycock unit.
I suppose you could test by spinning the input shaft fast enough - but on the bench I think it would be hard to tell if the shift had been made aside from maybe feeling a "bump". I would say just go ahead and install it if you have verified the solenoid is working. Use motor oil. The OD can be separated from the rear of the transmission easily enough if you do need to make repairs after installation. Volvo did make a change in the width of the "O" ring seal for each of the 2 engagement "pistons". If yours is slow to engage that would be one area to examine. -- Dave