Third gear in a TH700R4 is exactly the same as third in a TH350. It is direct drive in both cases, so there are no gears involved, just the third gear clutch pack. I would assume that a TH400 has larger/more clutch disks, so it will hold more torque in third.
If your 700R4 will not stay in O/D with 33 inch tires and 4.56 gears, something else is wrong. It should have no problem running in O/D with that overall ratio.
It will not hurt the tranny at all to run in D instead of O/D, in fact it is better for the tranny.
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Tim
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