Man, what a saga this transmision stuff has been!
Here's a thread on the issue:
https://stangnet.com/mustang-forums/threads/downshifting-from-3rd-to-2nd-issue.931803/#post-9459412
Even though the shop was convinced it was clutch related, a new clutch didn't fix it. They said the clutch was definitely worn, and the new one feels great. Until the transmission gets hot.
I discussed my options with them and chose to let them rebuild my transmission. That was going to be several hundred dollars cheaper than a new one from LMR. Well, the car got lost in the shuffle waiting for parts and then they lost a tech. It's been more than two weeks and nothing has been done. I talked to them this morning and they were about to pull the transmission to do an inspection. After talking to them about parts availability and timeline, I did what I should have done two weeks ago: I pulled the trigger on a new World Class T-5 from LMR.
Hopefully, this thing will be fixed and back together by the end of the month. The good news is that it will have a brand new clutch, flywheel, and transmission.