I have had three of my TH700R4 filter seals fail within only 250 miles which resulted in burned 3-4 clutches each time. One of the filters was made in China, another was a Filtran and the other was a WIX.
When these seals fail the first symptom is the failure for the converter lockup to work and then the 3-4 clutches start slipping. Upon removing the filter I find the seal's internal and external ribs had flattened to the point in which they failed to seal so the pump sucked in air.
The solution is to replace that orange seal with three 3/32" X 11/16" X 7/8" Viton o-rings (although neoprene o-rings will also work). The o-rings are a bit harder to compress but they will retain their tension and provide 100% sealing.