Bearing fatigue and fretting is more common now than ever with most trannies now looking at high miles and years of abuse. Pic below are of a couple of failed bearings. The unit on the right shows signs of fretting, which is when the bearings metallurgy fails and it starts to come apart with chunks missing. Sometimes this is due to poor metallurgy from the factory, but in most cases it just has to do with abuse and old age. Unit on the right had 2 needle bearings fail and disappear:

If a fretting tapered roller bearing starts to fail, it will soon fall apart and cause serious tranny gear damage. Pic below is of a taper roller bearing that came apart on the left:

When the rollers worked their way out and started floating around in the tranny, several gears were damaged:

If bearing preloads are loose, they will live a long time, but the gears will not. Tranny gears are always trying to push themselves away from each other, so when the bearings are loose, only the edge of the gear tooth is used. When preloads are tight, it keeps the gears together tight, so they will use the thickest part of the tooth and handle more power and more miles. We have found that the aluminum tranny case expansion due to temperature changes is linear. We set all preloads to be too tight at room temps so when the case warms and expands, the bearings will be right at their sweet spot! We have the preloads set during assembly at room temps so when the tranny reaches normal operating temps they will be right on the money. We try to find 0-.001" too tight at 220F. This way when the car is warmed up and driven hard the bearing is not under enough load to die, and the gears will be happy. Plus, you will notice smoother up-shifting.