A998 & TF-1 - Harsh 2-3 shift

But your idle is, and therein lies your problem. You need to get the idle down to a more sane 750 in Neutral, or less.Once your idle speed is down, the harshness will go away.
I have no chance getting it that low. When I initially fired up the engine first time, the idle mixture was very rich (primaries set way open, exposing transfer slot). This made me able to idle at a lower RPM. Would low vacum engines take a richer idle mixture?

If you have to jam on the brakes when in gear, then the idle is too high or the stall is too low,or both.
I don't have to put much effort keeping it standing still. The converter has a advertised stall speed rating at 1800 RPM.

If you cannot get the idle down,and the engine not stall when putting it into gear;something is wrong. The problem could be; in the carb,or in the compression,in the cam install,or the TC. It's usually a carb adjustment,but not always.
You need to;
Make sure the PCV is installed,correctly plumbed, and working
Set your T-port sync,Then set your idle speed with;timing and/or idle air bypass.
The other option is to install a TC with a higher stall.
I degreed the camshaft when installing it.
I do have the T-port sync set.
I run the M/E Wagner dual flow adjustable PCV valve in fixed orifice mode (due to the rough idle/low vacuum). If I remember correctly I'm pulling roughly 12 inches of vacuum at idle.
Initial timing set at 24 degrees. Could it be that this engine would run with locked timing? I'm at the DCR limit for pump gas.

I just recently modified my carb for idle bypass through the center of the main body. I haven't done much testing after this, because I have to fix some clearance issues between water pump and radiator first.