From what I understand, the stock transmission bypass valve is similar to a thermostat. It is activated at a certain or higher temperature to allow the fluid to flow through the cooler. This bypass valve allows the fluid to be cooled from the start of the engine. It helps to keep the transmission oil at lower temperatures. Someone feel free to correct me if I am misinformed.
Here is a link to the website for more info.
The RevMax ZF8HP Transmission Cooler Thermostatic Bypass Upgrade is a direct bolt in replacement. No lines are cut, nothing is altered. Simply disconnect your old lines and install them into our new bypass.