Let's talk about the "Tow/ Haul" mode. Why is it there?
As a former automatic transmission specialist for GM and Ford, I'll happily share with you the training I got from world-class gurus at those factory training facilities.
Automatic transmissions with integral "overdrive" have a great advantage over non overdrive units in their abilities to reduce high speed cruising engine RPM, thus improving both fuel economy and engine life! Problem is, for every advantage, there are usually one or multiple disadvantages.
In the good old days, transmissions didn't have lock up torque converters, AND the final drive ratio OF the transmission was always 1 to 1. So, as my late grandfather would do, he would back his 455 powered Pontiac Grandville with the venerable TH400 tranny to his heavy boat trailer, hook said boat and trailer to the receiver, and put the shifter into "D", and go. No problem.
Enter the more modern 3-speed trannies of the early 80's that incorporated lock up torque converters, and the problems began. The twinky-noodle clutch in the converter for lock up was good only for cruise speeds at light throttle to maintain cruise conditions, NOT for towing of heavy loads. Period.
Add in the internal overdrive system of, oh, say the MD8 (TH 700R4) introduced in 1981. This combined both the overdrive WITH the TCC (Torque Converter Clutch) locking up. This was/ is a recipe for disaster when one tows a load or lades down a truck/van/ SUV and drives high speeds in overdrive. Why?
Enter that ancient dead dude, Archimedes. The laws of leverage and "mechanical advantage". See, most modern transmissions operate at anywhere between .69 to .75 to 1 ratio for overdrive. This means one is using the short end of a lever straddling a fulcrum to provide power to move a car/ truck. This is known as "Mechanical disadvantage". Add a load, and the stresses on the gear train of the O/D planetary set under overdrive conditions, and their longevity goes into the toilet, simply because the strain on them rises exponentially.
Add the twinky-noodle converter clutch into the equation, and what we have here in an unscheduled Bar-B-Que due to a combination of naturally lower line pressure and the mechanical disadvantage of overdrive AND NOW Ladies and Gentlemen!, We add WAY more heat into the equation! And "Whizz-Bang" go components!
Through much trial end error on the Big3 companies' R&D departments, they figured all these dynamics out! Upgrades over 40 + years have developed into a "Tow/Haul" mode which in many cases disables the overdrive, increases line pressures for the added stresses to the drive components IN the transmission, and in some cases turns off TCC. You ever notice, too, that Tow package equipped vehicles have larger radiators and external transmission oil coolers? Yup.
Some light trucks come equipped with transmissions originally designed for medium duty trucks... e.g. Allisons in GM's. This enables use of overdrive AND TCC in some instances, but let's talk overkill!