I'm not an expert on how exactly transmissions work or how ones in our cars are supposed to work, or if this has to do with the torque converter or if mine's even working (i've tried the step on the brake while cruising with foot on gas trick, but rpm does not change)

For example, in any other gear aside from OD, you'll be driving, youll let off the gas, you feel the car slow down. Once I'm in overdrive, I can let off the gas and the car still kind of "goes" to a certain point, it still slows down a little bit, but when I'm coming up to a red light, if I want to cruise and slowly slow down coming to the light (without braking), I have to shift out of OD to feel her slow down, unless im already doing 40mphish, then she downshifts at about 36-37 (number could be off since I hear digital dash's aren't accurate). She usually shifts into OD 40-45 and out around 36-37. When I got her someone kicked the idle rpm up pretty high, like 800rpm.. and she would actually stay at a steady speed (and even speed up 1-2MPH) while in OD and the foot is off the gas. Right now the idle is at 500ish.

'87 TA 305 TPI 700R4 (car has 200k miles on it, not sure about tranny)

 

Sounds normal to me.

 

There's an overrun clutch that lets the transmission coast with no engine braking when the selector is in O/D.