99 z71 175,000 Miles trouble free on my 4l60e towing a 24ft boat IN OD. Previous owner towed a snowmobile trailer but no idea if he used OD or not. I was the second owner, I put about 40,000 miles on the truck.
It IS the manufacturers reccomendation to TOW IN OD. Consult a transmission professional, not smiley, not myself, and find out the specifics on why you can or can not tow in OD.
heat is the enemy of transmissions, if you can tow in OD and keep it cool I dont see it doing any damage, but every truck is different.