Just to make it clear...You do have an automatic box ?....
..If so you would NOT be "locking out" the O/D.
In fact you be making the O/D permanently on, so you would only be losing the function of the button to make it drop down to 3rd gear.
The O/D is designed to be on all the time .The button is for towing or steep inclines where the gearbox might jump in and out of the higher ratio gear.
That's why the light is OFF when the O/D is used.
The light being off doesn't indicate O/D is engaged ,instead it indicates only that you have pressed the gear stick button and your button is working.
A quick internet search will confirm it has been done by hundreds,maybe thousands, of owners around the world without issues.
IPD in the US ,a reputable parts supplier , has a blanking plate that does the same function as the mod.
ipdusa.com/products/4793/110397-automatic-over-drive-solenoid-bypass-kit
Here's a good write-up on how to do it.
brickboard.com/FAQ/700-900/TransmissionAuto.htm#AutoTransOverdriveProblemsSolenoid
By doing the mod you also lose the need for the relay ,the button on the stick and the dash light as they become redundant.
Just checking the O/D solenoid cable to make sure the cable's plastic covering is intact and not shorting on the gearbox or under body is easy to do , and the first thing I would do.The cable is prone to falling to bits from old age.
Speaking from experience it's super easy , a couple of hours work and there's lots of write-ups on the net for guidance.
If your changing the gearbox then you won't be paying for a new part that will be trashed eventually.
Just sayin' ...It's nothing to fear..
Good luck.