I have replaced the trans seal numerous times as I have rebuilt dozens of these units. It is very important for the health of the solenoid. It is like any oil seal - remove the old one and drive it in like any oil seal - only smaller. I do not remove the seal from the solenoid itself as I have not found a source for a replacement. The main problem is the one in the trans.
Fred

1956 3100 Pickup/Red/350/3sp OD/PS/Disc Brakes
1957 Bel Air Sport Coupe/Red/355/TH350/PS/Disc Brakes
2017 Silverado LT Single Cab SB/Black/5.3/6 Speed Trans
1947 Willys CJ2A w/F-Head engine