The definition of overdrive is when the output turns more than 1 revolution for every revolution of input. Mercedes do indeed have overdrive - 5th gear in my car is (92 300SE) is 1 revolution of the transmission output shaft to every (I think) .70 revolutions of the crankshaft.

Overdrive can be in any gear (the latest Corvette has OD in 5th and 6th gear).

Far as I know, any MB car that has a 5 or 6-spd automatic has OD in the top-most gear.

The shifter bushings can make a big difference, especially if the shifter is vague enough (due to the missing bushings) to not properly set the shift-position switch to tell the transmission that top-gear has been selected via the shifter. Try downshifting to 4th and then upshifting to 5th and see if that helps.

I'd get the bushings replaced - and pulling codes is definitely good advice.