I'm pretty sure the limit on counter-attacks is 3.  It may be based on action points but I can't say as the only units I've really fought against (that I've let counter-attack) get 3 attacks per round normally.  But there is definitely a limit as I've used a strategy of letting 3 units each attack once to spread out the damage then each unit finishes attacking without any counter-attack on the last 6 attacks (2 each).

 Yep, I think it's 3.  Just make sure you have your higher defense creature attack first.

This is side-effect of upping default combat speed to 2.

When it was 1 which ment 2.0 actions per turn, most units had just 2 counterattacks.

Now, after changes, almost any unit can move 2 tiles, and weapons that add to combat speed are hardly interesting. Difference between 3 and 4 actions per combat is very low. Same movement speed in battle, just 33% more attacks. Did had much more impact before.

Deflect

I am pretty sure the number of counter-attacks is the same as the number of attacks that unit would have if it was its turn. You can even watch its action-point bar decrease by 1 for each counter-attack it does(during other side's turn). When it runs dry, no more counterattacks.