My wife had a '99 Passport EX (54,000 miles) until she got an '04 MDX.
We were lucky that nothing major broke, since Passports are a POS.
But, the tranny does shift very smoothly if it is working right.
Sounds like your friend's is trashed. 3500 pounds is a lot of weight
to tow. A Passport only weighs 3700.