You call it a flawed piston. I would call the new piston an improved version and I'm sure thats the way MB sees it. The problem that occurs is that during the release of the B2 band (in all 722.3 trannies not just 126 versions), pressure is exerted on the back side of the piston to assure prompt release. This is happening at the same time a clutch pack is using the same pressure source to inflatethe cluth pack. The piston is about 3+ inches in diameter and originally had a teflon piston ring installed similarly to the steel rings of an engine piston. It was about the thickness of an engine piston ring also.
The new piston uses a teflon ring that is built like an umbrella, its surface area to the cylinder is about a quarter inch instead of less than an eighth inch and the umbrella effect allows the pressure to apply the sealing surface instead of opposing it.
The end result is that the fluid losses occuring in the release of the band are reduced which keeps the clutch filling to the original specs and reduces the tendency of 4th gear to flare.
There is absolutely no reason to do anything to an old tranny untill flaring becaomes a problem. By the same token there is no reason to rebuild a tranny and not change this piston.
Bosch Master, ASE Master, L1
33 years MB technician