Sequoia Torque Converter Failure

Indeed, the symptoms you are describing, specifically the error codes coupled with the unclean shifting and grinding noises, do point towards a potential issue with the torque converter lock-up clutch. Has the automatic transmission fluid been inspected recently? If the fluid level is adequate and the fluid is not burnt or contaminated, it unfortunately further supports the diagnosis of a defective torque converter.

Fluid levels are fine and it looks clean. If it is the torque converter, is it driveable or will it cause more damage?

Given the symptoms and error code, continued operation is inadvisable as it might cause further damage to the transmission. I would recommend that the vehicle be transported to a qualified workshop for a thorough inspection. A damaged torque converter can contaminate the transmission fluid with debris, leading to premature wear of other internal components. Addressing the issue promptly will likely mitigate additional repair expenses.

Thanks for the advice. Took it to the shop and they confirmed it. Torque converter is toast. Quoted 2120€ for the repair. Ouch!