News from the time [0], certainly suggests that regulation was the cause, rather than synthetics being "better".
> The trouble involved the cooling unit for the automatic transmission oil, which is placed in the car's radiator. The fittings between the cooling unit and the radiator gave no trouble when whale oil was the fluid, but the substitute allowed the fittings to corrode. That permitted the oil to get into the radiator's cooling system and the radiator's antifreeze to get into the transmission.
> The trouble involved the cooling unit for the automatic transmission oil, which is placed in the car's radiator. The fittings between the cooling unit and the radiator gave no trouble when whale oil was the fluid, but the substitute allowed the fittings to corrode. That permitted the oil to get into the radiator's cooling system and the radiator's antifreeze to get into the transmission.
[0] https://www.nytimes.com/1975/04/17/archives/transmission-pro...