Not sure I can explain this correctly this late...
Direct -- means that the final gear ratio out of the transmission is 1 : 1. (5th gear in the case of 5 speeds; 4th gear in the case of 4 speeds or drive in the case of 727)
overdrive -- means that the final gear ratio (5th) out of the transmission is <1 : 1.
Nowadays, most transmissions have an "overdrive" gear.
In the 60's / 70's, most transmissions did not have an "overdrive" gear.
The choice of which five speed transmission was based on the "use" -- if you towed a trailer weighing 6,000 - 8,000 lbs frequently; then, the overdrive transmission was not the best choice. There is a "wide split" between 3rd and 4th gears.
In the case of my t/a (which has a t-34), the difference between 4th (direct 1 : 1) and overdrive (5th is .83 : 1)) is approx 500 rpm for the same road speed.