Manual transmissions use oil only for lubrication, not as a hydraulic fluid to operate components. As bearings and other metal parts wear the fluid transports the particles across a magnet which removes the steel particles but not the brass particles from the synchronizers. Also, the oil over time loses its lubricating ability and it thickens. When this begins to happen it is time to replace the oil.
Automatic transmissions use fluid for lubrication and as a hydraulic fluid to operate servos and apply clutches. Many manufacturers are using synthetic fluids that require service less often. However, when the fluid becomes oxidized due to age and heat, it needs to be changed. Flushing is the preferred method of replacing transmission fluid because 100% of it gets replaced.