This tranny has always confused me. When my dad first bought the car, I used to drive it and I SWORE it was auto...it would upshift and downshift on it's own. Im almost positive but it was a while ago. When the motor went, I did the new one at the speed shop I was working at. My boss did the tranny linkage and other misc things for me the next day after I sat the new motor in (I got sick and couldn't make it but we needed the car off the lift). He told me there was something weird about it, I just don't remember what...but he said he fixed it and ever since then it only worked as full manual. I never checked it out because I never had a problem with it, it always shifted fine although if clunked hard into reverse sometimes but not if you put it in first then reverse. It holds every gear, including thrid. If you leave it in third, it'll take off in third. The motor was real rigged when I took it apart (mismatching connecting rods ect...) so I assume the tranny may not be any better.
As far as the engine braking, when you put in first, gun it up to redline then let it slow down, the car will slow down with what sounds like engine braking, it doesn't just roll to a stop but the motor slowly comes down sounding like its under load, slowing the car down if that's what you mean.
Now that I think about it, SOMETIMES when I downshifted from second to first say coming to a stopsign, if I was at too high of an rpm sometimes nothing would happen and it would feel like you were still in second. But im pretty sure most of the time if you downshifted to first, it would slow the car down. I know it would always slow the car down if I put it in first, sped up and then didn't shift and let off the gas.
Im thinking if the trans is as frankenstine as the motor it's probably worth replacing it while it's all out anyway. I can't afford any more cases of part "y" breaking part "x" as it self destructs lol