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Most probably because the owner or technician put TOO MUCH fluid into it...

Either too little or too much fluid into an hydraulic transmission will cause trouble and/or damage, because the fluid is the means through which power is transmitted from engine to wheels; a too low level can rob the control valves of enough fluid, cause the pump to loose suction and raise operating temperature too high. An excessively high level can reach the gears, which will churn the fluid and it will be highly aerated, resulting in a froth or foam that will destroy the proper lubrication of the components.

Both conditions can lead to fluid being thrown through the dipstick tube. To correct this conditions, first assess the condition of the fluid: color should be light cherry red or slightly brown reddish tinge, but still transparent; odor should be characteristic, but lacking any burnt smell.

If any sign of fluid degradation is seen or smelled, fluid should be completely drained and flushed. To assess damage to the internal components, removal of the transmission pan is required. Usually there is a magnet inside the pan, which will catch most of the metal dust resulting from normal wear, collected after several years of use. If the total "sludge" formed with metal dust and small shavings amounts to less than a teaspoon after say, 40,000 miles, the transmission is OK. More than that could be considered excessive, and mean the transmission will require an overhaul soon. A simple traditional "Fluid Change" as performed by 95% of the shops, only changes about 45% of the fluid, since 55% or more of the total is kept inside the Torque Converter, which cannot be drained unless the transmission is completely disassembled. To do a proper "Flush" which will replace more than 95 of the old fluid, the technician MUST connect the fluid hose going to the fluid radiator or cooler, and then add several more quarts of new fluid in order to push out the old fluid inside the converter. This should be done after dropping the pan, cleaning it perfectly, changing the filter inside the pan and its O'ring, and this is done by putting the transmission in Park or Neutral, and starting the engine, then the internal pump will pump-out the old fluid at the same time the technician (or savvy DIY) puts the same amount of the fluid being pumped out, Not more, not less. This requires using a disposal container marked every quart, so that the person doing the fluid flush can replace the same volume of the old fluid being pumped out. To assure that the fluid is completely renewed, it is usual to use about 40% more fluid: if the trans use 10 quarts, buy 14, therefore ensuring a complete and efficient flush of almost all of the old fluid.

Final level checkmust be done with the transmission at operating temperature, because the fluid expands quite a little between ambient temperature and hot.

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Q: Why would the transmission fluid blow out dipstick?
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