I've yet to find a true diagnostic for this problem. Just had the software updat

Your Volvo has Aisin Warner AW55/50SN transmission that is known for problems. Usually, unless you have internal damage like burned clutched, band, cracked piston etc. there is a problem with valve body. If there is no error codes in transmission control module, valve body is causing delay engagement, harsh shifting, 2-3 flaring. Even if you buy new valve body from Volvo, it will not last very long. Valve body has to be modified with updates, then installed and adaptation to be performed, that is only way it will work correctly.