From google:
"Overheating is one of the leading causes to transmission failure. A transmission should run at about 175-200 degrees Fahrenheit. It is not uncommon for the transmission to exceed temperatures of 350 degrees. Overheating the transmission can cause severe damage to the internal parts of your transmission. It can cause warpage to metal parts, degradation of fluid, sticky valves, and the melting of seals. Dexron-Mercon III is designed to last up to 100,000 miles. Any 5 degree increase in fluid temperature will reduce fluid’s life by 5,000 miles. The parts inside your transmission are categorized into two categories: soft parts and hard parts. The hard parts are, like described, hard. They are generally made of hard steel or aluminum. For example, a drum or a planet is a hard part. The soft parts of a transmission are made up of the rubber seals, gaskets, and clutches.
There are a few common ways to overheat your transmission. Listed are the most common:
- Speeds over 90 mph
- Towing a heavy load
- Stop and go traffic in hot weather
- Racing
- Repeatedly putting a car in drive and reverse to get unstuck from mud or snow
- Running your vehicle in 4WD generates more heat than normal use.
- Neglecting scheduled services
As you can imagine, a lot heat is created inside of a transmission with all that work and shifting it does when you use it. Your transmission uses the radiator to help maintain a safe constant operating temperature, and the fluid to cool and lubricate all those moving parts inside your transmission. Transmission fluid begins to cook at 200 degrees. After it cooks, it carmalizes and then burns. This is one reason it is crucial to change your transmission fluid regularly"
Hot ATF is less viscous and can varnish. This can cause wear of your friction material that can then clog your internal valving. Also, as mentioned above, you can warp internal parts etc.
