I've never heard that before. Do you have any links with more information on this?
From what I've read on here, 96-98 tranny's have a different valve body than the 99-00 tranny's but there are no other changes. The 01/02 tranny's do not have a kick down cable and also have a different amount of shift solenoids which is why they do not work with the 96-00 transmissions.
I've never read (other than now) that using the different valve bodied tranny, was in any way potentially harmful. I'm curious as to how it would be bad? The original valve body is still in the original transmission. I could see how it may be an issue if you installed a different valve body in the tranny then what it originally came with. Unless something electronically from the ECM would be sending a different "signal" to the solenoids than it would normally be getting. All of the connectors are the same and everything else, from what I can remember, is identical.