2016 Ford Fusion 2.5L – Radiator internal cooler failure, coolant contaminated with transmission fluid – risk of engine damage?

I'd be more worried about the transmission, and even that can be taken care of.

Transmission fluid is a petroleum product, and that won't hurt metal engine parts. Over a number of heat-up / cool-down cycles, that fluid will work its way into the coolant reservoir where it will float on top where it can be sucked out with a turkey baster. The bigger concern has to do with the radiator and heater hoses. Those do not like petroleum products. Transmission fluid and engine oil will rot them from the inside over time.

As for the transmission, the coolant itself won't damage parts, but it can clog the tiny passages and the valve body. This is one time where I would recommend a complete transmission flush. Normally at higher mileages like what you listed, I tend to avoid a complete flush because a failure down the road is not uncommon. Opinions vary, but my suspicion is the clutch plate material flakes off over time, and the resulting grit helps the plates remain engaged and prevents slipping. By flushing all that grit out, there's less friction to hold the clutch packs engaged.

Other people believe that grit remains lodged inside the clutch drums, and flushing breaks it free where later it grinds against the rubber lip seals causing leakage. That can also lead to slipping clutch packs.

Regardless of the cause, normally at higher mileages, I prefer to do the simpler "drain and fill" with a new filter. That only removes about half of the fluid. There's still fluid in the multiple clutch packs, passages, and the cooler. Yours is not a "normal" condition, so I would pursue the flush.

Keep the heater and radiator hoses in mind. If no more dark gunk shows up in the reservoir after a few months, the hoses likely will be fine. The rot from the inside takes some time to develop, and that's from petroleum products that have remained circulating for a long time. If your mechanic is not recommending the complete transmission flush, it could be because the new cooler in the new radiator won't have any transmission fluid in it, so there's no need to flush it. I'd defer to his recommendation for the transmission, especially if he's run into this before on this model. If shifting problems develop, that would be the time to do the complete flush. If that doesn't solve the issue, a good, used transmission from a salvage yard would be a reasonable solution for a car as new as this one, but the replacement should include flushing the transmission cooler to remove any debris that has collected in it.

What has been done to resolve this?

Here's what I found from our online source. It looks like your shop is in line with the flat rate guide. That guide sets normal, expected times for various services. Keep in mind the web site can be slightly outdated. Labor times won't change, but parts prices do. They use prices from the dealerships' parts departments.

Most notably, the time listed for transmission service is for the less expensive drain and fill, which is the more common service. Your job is more involved, with flushing the cooler lines and all of the transmission including areas that don't drain on their own. For flushing the cooler lines, add 0.6 hrs.

I don't see hoses mentioned here. Given the time the vehicle has had transmission fluid in the coolant, I'd be worried about them. I was surprised to see the upper and lower radiator hoses total $115.00, about double what I expected. Labor for either hose is 1.4 hrs. Labor for "all" hoses is 1.6 hrs. That suggests there's a lot of stuff that has to be disassembled just to get to them, then it's a simple matter of replacing them as it's only another 0.2 hrs. To do the second hose. Heater hoses weren't listed. Some cars use expensive molded hoses to avoid obstructions and sharp edges. When there's nothing special about a hose, most shops just use bulk hose cut off from a long roll. This is sold by the foot, and is usually pretty reasonable.

Let me know when the service is completed and how it goes.