If you are doing a transplant, I suggest that you disassemble the transmission and OD and at minimum replace the gaskets and seal it up with a quality sealant like one of the Hylomar Blue compounds. Besides, I sometimes think that everything that Volvo knew about gaskets they learned from British Leyland! Enough said! Unless the transmission and OD have been rebuilt, you should expect that the gaskets will have aged and are going to leak. Any M41 is going to be 43 years old (or more likely more). Keep that stuff clean and topped up with something like Red Line MTL and it will probably operate just fine.

The same problem can be caused by dirty screens on the oil suction. If the oil level drops in the transmission / OD assembly you can have problems maintaining adequate pressure to keep the OD engaged and it may engage and disengage (repeatedly). The J OD in my 1971 142 has had no significant issues.