There is a fuel cutoff at around 4000 rpms in order to protect the torque converter from high static pressures when the engine is being excessively revved when the car is in neutral.
I believe what you are describing is supposed to happen. At least that is the way it is with the 722.6 tranny, I could be wrong if the 722.4 doesn't have this protection function, but I believe it does.
1999 Dodge Ram 2500 Cummins Diesel
2002 Harley-Davidson Fatboy
Merlin Extralight w/ Campy Record