In my scenario, you're going downhill using the locked TC and engine to slow the vehicle. Your foot is not on the gas, the truck is being kept at a slow speed by the resistance of the engine. If the grade was steep enough to cause the vehicle to go faster than you desire, you'd have to hit the brakes. Sumotoy's mod would have the TC lockup disengage when the brake pedal is depressed, assumably using the brake light circuit as the trigger rather than brake fluid pressure. The brake light circuit is engaged at the very top of the pedal travel, while brake fluid pressure doesn't build up until the pedal is well down. That means the TC would disengage, allowing the vehicle to succomb to gravity and lurch forward before the brakes actually begin to work. Jamming on the brakes quickly to avoid that lurch is not intuitive, nor conducive to a safe descent in certain situations. Having the truck surge forward could build up enough speed and/or momentum to make control difficult or impossible, depending on the terrain.
-Spike
Okay, I can understand your concern.
You gotta remember though, the TC will work both ways, even unlocked. That is to say, the fluid in the TC will resist change to a certain extent. Since we have the TC locked, the fluid is essentially spinning at the same speed as the engine/tranny. When the TC unlocks, it's not going to let the tranny instantly speed up.
I think you're thinking of it as completely engaged or completely disengaged. But it's really more like a manual transmission, where it's more akin to pressing on the clutch at a relatively slow speed.
So yes, you are going to lose your engine braking, but you won't lose it complete and you won't lose it instantly.
Now, of course, the multi million dollar question is....how long
does the TC take to to overcome the inertia of being locked, and is that slower or faster than it takes for the brakes to engage?
I'm not sure anyone can answer that one without actually doing the mod and testing it out. Personally I think that the brakes will engage before the inertia in the TC is overcome, but that's purely a guess.....
Let me try an example that maybe closer to your understanding. Say your ice racing, taking a turn at the very limit of adhesion, would you want the trans to suddenly downshift? My guess is that your doing everything possible to be as smooth and predictable as possible?
I'm not sure how your example/point applies (or even what point you're exactly trying to make

).
Having the TC unlock and the transmission downshift are two
very different things. (Assuming you were actually trying to relate the two.)
A fully locked TC means that the slightest pressure (or easing up) on the skinny pedal will have a direct effect on your tire rotation. An unlocked TC means that there's lots of slip, and things will be much more smooth.
Now, honestly, I can't see where a locked TC would be useful in the majority of rock crawling. I
can see where it'd be useful in coming down a hill, for the purpose of engine braking, but once you get down towards idle speeds you have to unlock the TC anyway or risk stalling the motor.
The only purpose I can see for a locked TC would be in cruising on the freeway, and downhills. With downhills for wheeling, you're already in low gear and have quite a bit of engine braking, so a locked TC is of limited use (especially at the speeds most people are going down tricky spots on).
I guess the real question is the cost/difficulty of the mod. I wouldn't mind doing it for the relatively rare occasion I'd use it if it was about the same cost as say the CDL switch.