One of my cars is a '90 300D that came with the same 722.4 trans. Since I bought it, I could never seem to get the trans to reliably kick-down under all circumstances. I tried futzing with the cable, swapping the kick-down switch, and yet nothing could resolve the problem. I got to the point of manually downshifting when the situation called for it. Very frustrating.

A few months back the trans just stopped shifting reliably--would upshift in rapid sequence--so I opted to swap in a known good 722.3 from a 603. Now, when I punch it, the kick-down engages right away like it should. Mind you, I re-used the exact same .4 kick-down cable, so I strongly suspect that this item is a red herring with regard to the OP's trans issues.