904 trans shifting issue

Shift overlap is when it's in a gear and a shift valve calls for the next gear but the previous gear is slow to release so for a split second its in 2 gears. Not good as you can imagine.

You say it's smooth going from 2 to 3. That doesn't really sound like overlap because overlap is generally a "jerky" sort of feel. Maybe I'm reading it wrong but to me your last sentence kinda contradicts how you described the 2-3 shifter earlier. If it is truly bogging down when it shifts and there's nothing wrong with the engine it may be experiencing overlap. Or it could be that with the tall hwy gears it's bogging down because the engine doesn't have enough guts to pull through the 3rd gear shift?? Shooting in the dark here