Theory Of Operation
WARNING: This page is about a different car, the 2009 Jeep Liberty. However, it is still accessible from the selected car via links, so may be relevant.
The temperature sensor is used to sense the temperature of the transmission fluid. Transmission fluid temperature can affect shift quality, torque converter operation and when or if some diagnostics are run. A failed temperature sensor could affect the OBD diagnostics. If a problem occurs in the transmission temperature sensor circuit, transmission temperature will be based on a calculated value.