The pawl catches in the large notch step of the balk ring when it's cocked for shift after the governor reaches on speed and the operating solenoid extends the pawl. It sets in the notch until the driver lets off the throttle. This action creates a reverse motion of the planetary sun gear and the balk ring due to the rear axle momentum and will move to allow the pawl to seat on into the gear plate notch. The balk ring has to have a minimum friction fit with the gear plate in order for it to move properly. I always make sure and check the friction fit of the balk ring when I have one apart.
The thing I notice there is that it looks like the lock out rail is engaging into the pawl locking groove or maybe that's just daylight I see there. That would keep the pawl from further engagement if it was in there. As far as the little step on the balk ring, it would move back the other way as soon as the driver pushed back down on the throttle but the shift rail is what looks to be blocking the pawl unless I'm just seeing things. I really can't tell if you have a problem there yet without being able to tinker with the works.
Your going to know how these units work after all you have invested into these checks. I learned using the 1949/51 Lincoln Mercury Overhaul manual during my own overhauls of those units. All of the Borg Warner designs work the same way whether its a Ford, Chevy,or Studebaker model.
