I control the lockup in my TH350C tranny with a B&M Lockup Control. It senses the mph. You can adjust it to what mph you want it to lockup at. It costs $175.95 thru Summit. The lockup will reduce the rpm about 200-300.
Or...you can run the TH350C without any juice going to it...it just won't lock up. I don't think a Lockup would improve a 400 HP engine's gas mileage.
Weaker than TH350?....I dunno. Will hold up to 400HP SBC?...I dunno.