Transparent 1 uses 80 byte packets.
Transparent 2 uses 314 byte packets
Transparent 1 would put a lot of delays/pauses and headers in, thus running slower data speeds. Transparent 2 would run fewer/larger packets, increasing throughput.
As for why it doesn't work on yours, you need to be sure both radios are set up the same. Same comm port, same transparent settings. If they are not matched, they won't talk.
From the Kenwood NX-x00 Function Reference manual:
The communication port of the transceiver assigned “Transparent” sends the received data automatically using the FleetSync protocol or NXDN protocol if the received data size exceeds 80 bytes upon the receipt of data from an external device.
The communication port of the transceiver assigned “Transparent 2 (NXDN)” sends the received data automatically using the NXDN protocol if the received data size exceeds 314 bytes upon the receipt of data from an external device. By using Transparent 2 (NXDN), data can be sent faster and more efficiently than by using Transparent.
Analog data transmission uses the FleetSync mode. There are two settings:
1200bps and 2400bps.
1200 is preferred as it's more reliable and works over a wider area. 2400 will work, but reliable coverage is reduced. More errors at that speed.
12.5KHz "narrow" NXDN mode will provide about 3700 bps
6.25KHz "very narrow" NXDN mode will provide about 1850 bps.