On the 1-2 shift, all that happens is the kickdown band applies to stop the front drum from turning. In 3rd gear, the front drum needs to turn again so the kickdown band has to release and the front clutch has to apply at exactly the same time. The timing is critical.
If the band releases...
It really depends on what you plan to do with the car, how much power, etc. How often do you plan on swapping ratios? Remember, the Dana is heavier in unsprung and rotating weight than the 8.75 which itself is heavier than the 8.25.