Theory Of Operation
WARNING: This page is about a different car, the 2005 Jeep Grand Cherokee. However, it is still accessible from the selected car via links, so may be relevant.
The Transmission Control Module (TCM) constantly monitors the amount of torque converter slippage. When the torque converter clutch (TCC) is open the slippage is expected to be above a threshold. If the slippage is less then expected when the TCC is open, the TCM assumes that the TCC is stuck on.