I opened up a failed overdrive switch to see why they fail. In the case of this unit, it would function but only after maybe 20 minutes of driving.

Inside there is the pin that contacts the shift linkages, and that pin has a spring-loaded plastic cap in the back of it.

That pushes on a rubber diaphragm that is used I assume to keep oil out of the switch contacts.

The diaphragm pushes on a metal pad that pushes against a spring inside the connector terminal. When the pad contacts the pressed metal ring, the circuit is completed.

In the case of this switch, I think it failed because the rubber diaphragm is hard and failing, so oil has got all through the switch, but also the contacts never close, because the diaphragm is so stiff it just compresses the spring in the pin.

Image description

The terminal is connected to the small plate in the middle via a spring. When the plate is pushed up, the contact pads touch the domed piece and complete the circuit.

Image description

The failed diaphragm.

Image description