Although transmission designs will vary, and earlier overdrive automatics were more susceptable, the overdriven gear was often engaged by a band wrapping around a drum or other means. Because less power and strain is usually used while crusing at highrer speeds in overdrive, the components engaging into the overdriven gear were not usually as robust as in the lower gears. Having a transmission that spent a lot of time needlessly going in and out of overdrive would cause these parts to wear faster and be the first pieces to usually fail.
A good example for locking out the overdrive gear was when I used to come home each evening and go along a slightly hilly stretch of winding road for about eight miles. As I started the area, I would lockout the overdriven 4th gear and leave it to operate as if it were an old standard 3-speed automatic transmission. Due to the cars gearing and tire size, 45mph is the average speed where the car wants to shift naturally into overdrive.
The speed limit was 45mph and was often enforced, so I put on the cruise control. I did this so the car would keep close to the speed limit without me having to watch the speedometer all the time. Being a rural road, they were often people pulling out of driveways and such, so I prefered to keep my eyes on the road all the time.
The car would easily run along in 3rd gear without ever going fast enough that the engine was revving high or working hard. When I was going downhill, the gear kept the car from going more than a couple of mph over the setting due to engine compression. It was a pleasant drive.
Now a buddy of mine does the same route, but he won’t lockout the overdrive in his car. So he goes up the same hills that I do, but on every one the trans has to shift down to 3rd for a few seconds, then back to OD on the downhill side. Two extra shifts for every hill. On steeper hills, the trans has to shift down 2 gears and then work its way back up.
Also, when he goes downhill, the trans is in OD, which means there is almost no engine braking, so he quickly starts coasting at the other side of 50mph and often has to use the brakes to slow down for curves because he is going too fast.
In these situations, it is better to lockout the overdrive and avoid all the unneccesary shifting on a transmission that will cost way over $1000 to have rebuilt when the time comes.