I have 2004 2.7L Intrepid SE with the "Chrysler Ultradrive A606 (42LE)" transmission. When I go in reverse it hesitates/slips (sometimes very "grabby"), took it to an experienced mechanic and was told it's trying to go into First and Reverse at the same time due to a hydraulic seal failure that's letting/trying to engage both Frist and Reverse gears at the same time.

The deciding determination by the mechanic was by turning the engine off while going in reverse, it then rolls in reverse smoothly (I verified that). There are no OBD codes flashing, transmission fluid level is as should be and fluid color looks clean. Car has 140K miles, and as far as I know from all the receipts that came wit the car when I bought it used at 106K miles, it has never had any transmission service.

I have not heard of a transmission doing this before and can't find anything online (may not be using correct search words), has anyone experienced this? Short of a full replacement, any ideas what may be going on, maybe the mechanic made the wrong determination and it's something else?