I’ll try, based on my admittedly limited understanding of all the details, but with probably more reading on steam engine tech than the average bear.
The steam valve, as I understand it, controls the injection of the fuel oil into the combustion chamber. Imagine a paint sprayer, bead blaster, or any other system where a stream of moving air creates a low pressure and brings other stuff along. Replace the air with steam (because you’ve got a ton of it and it helps heat the fuel at the final injection point), and you’ve got a system that will finely vaporize oil and spray it into the combustion chamber. I believe the fuel flow valve is separate, but the steam valve here will impact the pattern of the spray and how wide the spray pattern is, how far into the chamber it goes, etc.
Blowing the flame out with too much steam, and having a hot enough firebox that the now not-burning oil spray finds something hot and lights off again. You have, at that point, a firebox full of oil and air, not burning, and it starts burning all at once. It’s the same basic problem as a rocket hard start and RUD, just without (ideally) blowing the boiler up. I’m sure the efficiency of random kabooms is far lower than a steady, smooth burning of oil, before you consider the efficiency of disassembling a boiler full of steam.
The makeup water supply in the tender, which is unpressurized. Just dump it on in.