I think you got the modulator and diesel thing mixed up, the unique item in your MB diesel that can control the modulator on the transmission is the vacuum control valve on the injection pump. It bleeds off vacuum gently as you press the accelerator pedal.

This mimics the function of the intake manifold losing of a gasoline engine losing vacuum as the throttle plate is opened up.

The problem this user is having is not new, modulators are known to go bad in this way. There are dozens of such incidents on the internet, and usually identified by gasoline engine benz owners because of the smoke that happens.

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2012 BMW X5 (Beef + Granite suspension model)

1995 E300D - The original humming machine (consumed by Flood 2017)
2000 E320 - The evolution (consumed by flood 2017)