Trans cooler used for oil

Just because the aftermarket makes them that size doesn't make it right. IMO 1/2" should be the minimum i.d. so as not to reduce oil flow. Several yrs. ago I installed an aftermarket remote filter kit on my 360 and the oil pressure dropped 5-8 psi immediately. It came with 7/16" i.d. hoses and the fittings were only 3/8" i.d. I replaced the fittings with 1/2" i.d. and installed 5/8 line and the pressure went back up to where it was originally. Since the oil pressure sender is located on the output side of filter that tells me that kit as it came was pretty restrictive.

Cummins or any other V8 makes no difference.

When your lines are smaller you should see a pressure increase not a drop, Bernoulli's principal any restriction will increase pressure.