That is what I call 2-3 tie-up, caused by to fast of a band apply or to quick of a front clutch apply. A 5.1 band lever can cause this and so can removing front drum springs. BUT it should free up if you keep driving, if it is truly locking up, the band is not releasing enough at all.
Matt and I ran into this one to while testing his 727 transmission in the shop on jack stands. The wheels would completely stop in 3rd gear. We removed the aftermarket lever on our CRT transmission and the car ran better than it ever did. Lesson learned and the lever is in my junk pile on the shelf.
