The switches in the tranny read kinda funny. When you go into 3rd you'll see the 3rd gear indicator, but when the tranny goes into 4th, you see both 3rd and 4th gear indicators. It's how the tranny sends the signals.
Because there are no 1st and 2nd gear switches in the tranny. Remember this is mid 80's vintage technology. For certain things to occur, the ecm only needed to know when 3rd and/or 4th gear were engaged.