727 Transmission Efficiency...

Yes, you are referring to inefficiencies in the torque converter. Different torque converters (specifically "looser" performance converters) will have more slippage on the highway. With converters, you get what you pay for. With an off the shelf higher stall converter you can expect more slippage than with a more expensive custom built one. Also, the later (78 or 79 and on) "lock up" 727s (they have a special lock up torque converter) there should be minimal slippage on the highway. This was done for fuel efficiency.

To answer your question, the transmission itself should never slip in any gear. If it does it is toast and needs a rebuild.