I haven't actually used it because I have a 4 speed, but I thought that's what H2Seq did.
You do have to use a version of MAME that doesn't have the shifter in the game set up on a toggle.
Either RacerMAME or v.151 or newer with custom settings in the individual game cfg.
This is covered in the stickied driving cab info thread.
I'd give RacerMAME a try since it's from the same author as H2Seq.
It's important to keep in mind how these old Hi/Lo games originally worked.
To save money, they only had one switch for either Hi or Lo. If the switch wasn't tripped, the game just assumed you were in the other gear.
So the way a solution would have to work would be to engage the virtual switch when you push a direction, then disengage the virtual switch if (and only if) you push the other direction.
Not sure if that's exactly how H2Seq works.