Meters a descending load by holding back-pressure against it, so the actuator moves at the rate commanded rather than accelerating under its own weight. It opens progressively under pilot pressure and only as far as the flow requires, restraining the load continuously through the movement.

A check valve either holds or releases, with nothing in between. A counterbalance valve modulates - it opens progressively and keeps restraining the load throughout the motion. That makes it a motion control device that also holds, rather than purely a holding device.

The load runs ahead of the pump. The actuator accelerates under gravity, draws a vacuum behind the piston because the pump cannot supply oil fast enough, and arrives at the end of travel faster than intended. The motion is uncontrolled and the cavitation damages the cylinder over time.

Comfortably above the maximum load-induced pressure, with a common working figure being around a third higher. That keeps the valve closed under load while still opening at reasonable pilot pressure. It should be set against the real load on the machine rather than a nominal bench figure.

Usually a counterbalance setting too close to the load-induced pressure, so the valve hunts between opening and closing. It can also be pilot pressure instability or excessive hose compliance between valve and cylinder. Raising the setting is the first thing to try.

Yes - it seats positively rather than relying on a spool clearance, so there is no designed leakage path and the load does not creep. That is a genuine advantage over attempting to hold a load on a directional valve spool, which will always leak down eventually.

Directly on the cylinder port. A counterbalance valve in the pipework leaves the load unheld if the hose between valve and cylinder fails, which defeats the purpose. Port-mounted cartridge and block versions exist precisely so this requirement can be met without extra plumbing.