I know the adjustment on the vacuum modulator affects the timing of the 1-2 shift. Does it also affect the 2-3?

yes ... the modulator valve controls pump line pressure , when ever you raise or lower line pressure will change the shift in relation to the govenor pressure , line pressure and govenor fight each other for control over the 1-2 and 2-3 shift valve

at W.O.T. it is bypassed and the governor controls them.