ATF has friction enhancers that allow the fiber and steel clutch plates to get a good grab on each other to prevent or reduce slippage. Every part in an engine needs a slippery lubricating film between the parts to prevent wear. When the spark plug fires and places like the connecting rod bearings, piston skirts, etc. get heavy thrust loads, tha absolute last thing they need is an additive in the lubricant that makes the parts try to stick together. How about the extreme shear force the lube film gets between a camshaft love and the bottom of the valve lifter? With a physical thickness about the same as SAE 5 oil, the ATF just doesn't have the viscosity to cushion parts in an old stovebolt designed to run with SAE 30 oil.
Jerry
Edit:
Scott, the myth goes back a lot further than Type F. Way back in the early 50's, when Type A, Suffix A fluid contained sperm whale oil, the idea was that it would clean up sticky hydraulic valve lifters. That didn't work, either!
Jerry
