904 Reverse/1st gear issues

You say in forward AND I'M ASSUMING YOU MEAN DRIVE, "it shifts like normal".
Well, in Drive- breakaway, the L/R band is not used. Instead the rear sprag locks up. So you wouldn't even notice if the band was not there. If you pull it down into manual low; on acceleration, you still wouldn't know. but there will be no compression braking in manual low with a faulty L/R system.
In manual-Low the band is supposed to add much needed clamping power for things like; towing, being stuck, jack-rabbit starts, and initiating burn-outs,lol.
To get reverse, the trans uses that band and the Hi-drum
To get Third gear, the trans uses the Forward clutch and the Hi-drum again.
If third gear works properly, then the Hi-drum is working.......so that just leaves the L/R system.