I can only speak generically. It coming out of gear implies that it did not go completely into gear completely. which can be a linkage issue or I had a vehicle that had a worn sifter fork (worn on one face) that was not pushing the gear in far enough.

I am looking in a W123 manual at a 5 speed and it has specific dimensions from the front of the transmission for each of the 3 levers. There is no numbers just listed as A, B, and C.

Hopefully someone can give you a more specific answer.

If you keep your hand on the shift lever will that prevent the gear from disengaging?

I think you could put it into 4 gear and carefully remove the sifter lever cover and see what position the gear is actually in and also inspect the teeth on the Gear to see if they are worn (what other type of wear could cause the symptom).

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84 300D, 82 Volvo 244Gl Diesel