Attack.
Response (attack): After your hero defends against an enemy attack, deal damage to that enemy equal to your hero's ATK.
Q: Can I use Counter-Punch in response to a villain attack while I'm engaged with a minion that has Guard?
A: No, you cannot attack the villain while a minion with Guard is engaged with you, and Counter-Punch is an attack. -(Developer Ruling, Hall of Heroes)
Counter-Punch is a great card for Protection Heroes, as long as you have an ATK of at least 2. You could say that this is the Protection equivalent of Skilled Strike, but there are a few advantages in the trade-off of the proactive vs reactive nature of the two cards.
The first of course is that Counter-Punch scales with your Heroes attack. Whether it's a natural ATK of 3 or boosted with Combat Training, you can end up with 5 or 6 damage in the right circumstances.
The second is that CP has a cost of zero. The Heroes that have a natural ATK of 3 tend to have a hand size of 4, so "free" cards are very valuable.
The third is how effective Counter-Punch is with Defender-style builds, i.e. Heroes that plan on defending every turn and benefitting from from a series of Upgrades (e.g. Unflappable, Electrostatic Armor, Hard To Ignore). This turns what you were planning on doing anyways into more profit.
Finally, given the changes to the Defense rules, you can be exausted, play a (defense) Event, and meet the condition of playing this card.
As of Sinister Motives release (April 2022 here in the US), Ghost Spider (Gwen Stacey) loves this card. She can defend for at least 3, play this card, deal at least 2 damage, then ready. Two damage and a ready for 0 is a steal!
I rate this card an A: Not flashy, but provides Protection decks with inexpensive damage and combo potential.
Protection is beginning to have a lot of good options, Deciding what the goal of your deck is will have a lot of weight in determing whether to include this or not.