2001 Honda Accord 3rd Gear Pressure Switch

Got a flashing D4 light off and on for a few months. With it came the check engine light. The light came on when the transmission was shifting and it seemed to go into neutral for a second and then slam into gear as it changed like popping a clutch but this is an auto. I took it in today to a local Honda Dealer. After about an hours the service guy comes and tells me it is a 3rd Gear Pressure Switch and that I will have to replace the entire transmission. Cost $3,600 plus. I did not debate it with them but declined. The car drives fine and this only happens every now and then. If I shift the automatic manually starting in low gear and progressing myself through the gears and let some RPM's build during the shifts, it never happens.

My question is why I would have to replace the entire transmission because this part is bad? Can't you just replace the part?

Also got a bad alignment in the same visit. Went from pulling hard right to pulling hard left. I will take it back tomorrow to hopefully get that redone and wanted to talk to the service manager about the transmission issue with a little knowledge before I go.

Thanks!