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Hello, I'm Chris. Welcome and thanks for asking your question!
The servo push rod does have to be in the slot on the overdrive band or the servo will not apply anything and the band will be crooked and bind damaging the internals in the transmission. below are the Ford direction for installing this servo.
Just so im clear. I was told theres a small hole in the overdrive band next to the overdrive servo bay. Im suppose to put an angled pick in that hole and push the band towards the overdrive servo bay until I see the slot, then push the overdrive servo rod up into that slot?
I have never done it that way, I just look through the servo hole and see if the band slot is aligned with the hole, and then press the band through the hole with a pick to verify the band moves and applies. A band out of position is very unlikely, I can not recall ever having an issue getting the servo to line up perfect with the band.