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The only moderately credible thing I've heard about using ATF in an engine is that some rebuilders supposedly wipe down the cylinder walls with it when installing pistons. Theory: since its lubricity is not as good as motor oil, the rings seat faster.
I would put the stories of any benefits of using it as lube oil in an engine under the "Urban Legends" heading (but would be interested to hear otherwise).
Every owners' manual I've ever seen requires nothing but quality motor oil going into the engine. Frequently, this is accompanied by a warning against using additives, engine flushes, etc.
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Bob (son's 81-244GL B21F-M46, dtr's 94-940 B230FD, my 83-244DL B23F-M46, 89-745(LT1 V8), 98-S90, 77MGB and four old motorcycles)
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