As you mentioned, it is best when trailer towing to run with O/D off.. The transmission ECU is very aggressive about keeping the torque converter locked up when operating with O/D off to keep the heat down.. and is recommended by Toyota for trailer towing for this reason.

4th gear with the torque converer running in max torque multiply yields nearly the same gear ratio as 3rd gear with the torque converter locked.. The difference is the former generates tremendous amount of heat in the torque converter and the latter produces near zero in lock up state..

Read this for further explanation..