Sora shifts his Keyblade into a defensive stance. Similarly to Mii Swordfighter's Blade Counter, grounded opponents that hit Sora in this state will enter their rebound animation as if their attack collided with another, and Sora will launch a swift upward slash to counter. However, opponents can still hit Sora from behind without triggering the counterattack. Uniquely, this counter can also reflect projectiles with a 1.4x multiplier, but they will continue their normal trajectory.
Because the opponent is staggered on contact, Sora is able to break through attacks that are normally invincible for a longer duration and counter, such as Wonderwing.  The stagger effect is applied even if the opponent is fully invincible, such as from respawning. It can even force Hero out of Kaclang if Sora counters the falling hitbox, which no other attacks besides Metal Slash can do. The stagger is applied regardless of how far away the attacker is, even if they are out of range of the actual counterattack.
While the reflector does not alter projectile direction, it does change ownership to Sora. This means that stationary projectiles which overlap with the user, such as Lucario’s Force Palm, and returning projectiles, such as Link's Boomerang and Simon's Cross can hurt the original owner.  When reflecting a projectile, Sora skips his initial recoil animation (when the stagger would occur) and immediately swings his Keyblade, which is still capable of dealing damage.
Unlike many other counter moves, Counterattack cannot be B-reversed.
Guarding and using reprisals is a major part of combat in many Kingdom Hearts games. By successfully blocking or parrying an enemy's attack, they will be staggered, allowing the defender to use a quick counterattack to strike while the enemy is open. There have been many different styles of Guarding and Reprisals throughout the series, and sometimes the same character is able to use different defensive actions depending on their equipped abilities or Forms.
The defensive stance and counterattack seen in Smash are based on the Guard and Counterattack abilities seen in Kingdom Hearts, respectively. By using the former ability to parry an enemy's attack, the latter allows Sora to immediately attack a staggered enemy with an upward slash that automatically deals a critical hit and restores some MP. In the game, Sora will learn the Counterattack if he is at level 24 with the Dream Sword, level 21 with the Dream Shield, or level 18 with the Dream Rod (Level 57, 45 and 15 in the Final Mix version). It costs 2 AP to equip. Like in Smash, Guard only defends Sora against attacks in front of him.
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