Transmission Torque Converter Question at highway speeds with FJ Cruiser Automatic

My dad is currently pulling a 1500lb trailer home from Ohio to NJ. I was on the phone with him asking about how his truck was pulling and we got to talking about the gears and speeds. His FJ cruiser is exhibiting what I would consider odd behavior.

Basically, when he is in Drive (5th) on a flat grade, he is going 75 MPH at about 2000 RPM. This is normal I ran the gear ratio numbers and it was spot on.

When he downshifts to 4 he is running 75 MPH at about 2750 RMP. Also normal with the gear ratio's.

When he is in Drive(5th gear) and approaches a hill, the truck RMP shifts to about 2300 RPM but the speed doesn't change. Its almost like a gear change, but that gear doesn't exist its almost right in the middle of 4th and 5th gear. If he bumps it to 4 the RMP goes right to 2750 at exactly the same speed.

Am I missing something? The only way I can see for this to happen is that when the truck needs more power in overdrive (5th gear) it unlocks the torque converter to increase the engine RPM without shifting out of 5th. Therefore it is able to apply more power to the 5th gear to maintain the speed up grade.

1. Is this normal behavior. I've always read torque converters lock above 40 or so MPH and unlocking is bad

2. Is this why towing in OD (5th) is a big no no? The little gear plus the torque converter slip generates extra heat?

We decided that it would be best for him to downshift to 4th during any climbing to avoid the extra heat that may be being generated.

Thoughts?