Water in Transmission...

You sure there is even a cooler in it? Poke a probe into the fittings and see if you can "feel that it goes straight into the tank. What kind of plugs were in it? Were they substantial plugs? Maybe it was supposed to be a "stick" radiator
That was my thought too. But I can't imagine how/why they would have attached bungs to the place where the cooler passes through the tank.

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On a side note my daughter's 96 Jeep Grand Cherokee had red oil in the over flow bottle, traced back to a leaking trans cooler. It had a slight split that only allowed a tiny amount of fluid into the coolant, no signs of coolant in the trans.