On most of the NA'd 4T65-E'* isn't the torque converter applied at varying degrees to reduce slip and improve the fuel effiency?
You must mean the lock up feature of the torque converter. There is a clutch pack in the torque converter that effective locks it up so it acts like a direct connection between the engine and the rest of the drivetrain. It is electronically controlled.
A non lock up type of torque converter, like in my TurboHydramatic 350 that my Firebird has, will always slip a little, about 3-5% slippage at higher speeds.
When a lock up type locks, the rpm will drop noticeably, like going into a higher gear, improving fuel efficiency.