On the transmission shifter the button on the end of a shift knob which was used for disabling Overdrive is now called Tow/Haul on newer model trucks. It is different from the old use in that it controls the transmission far more than just disabling the overdrive gear. It changes the trans for higher RPMs on upshifts and senses speed to enable downshifting when slowing down or stopping.
When one is "in tow/haul mode" this means the button has been enabled and there is usually an indication on your dash denoting this. For my Ford F-250, there is an Amber light on the dash that says "Tow/Haul".
Your description implies it only prevents Overdrive from being used (which is the recommended operation when towing).
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