The LSV for those who are interested has three ports and a bleed. Fluid come in from the master cylinder and normally passes straight through and on to the rear brakes. However, inside there is a spring loaded plunger. As brake pedal pressure increases (due to soma asswipe pulling out in front of you) the pressure in the system reaches a point where it begins to depress the plunger. Fluid still goes to the back brakes, but essentially when the plunger drops it bleeds fluid off back to the front. It's just a relief valve in other words. But then there is the coathanger wire rod underneath to deal with. Contrary to popular belief this is not actually connected to the LSV. It pivots around the bracket, yes, but it's not connected to the plunger. What happens is, as the pressure builds up, the plunger drops, but also the car tips nose down. As it tips the long rod moves away from the LSV allowing the plunger to drop further allowing more fluid to go though the bypass. The rod does NOT pull the plunger down. So, adjusting the axle end thread to the top means that as you pitch forward, the plunger drop is restricted meaning more fluid pressure going to the back brakes. This doesn't necessarily mean you will lock up. You have to consider your tyres, brakes, suspension set up etc. Dropping the adjuster means that when you brake more fluid will bled off. If you have very soft suspension which dives readily, then this is more than likely where you will end up setting wise. If you have very stiff suspension then the back won't really lift that much and if you are heavy then you probably want to keep the back brakes working quite hard or all that effort will be on the front wheels.
I have found the best way to set the balance (for me) is to drive forward, brake hard note results. Reverse hard slam brakes on and note results. I am looking for really something pretty even in either direction. If you drive backwards and the brakes feel much better than going forwards, then I'd drop the arm a little to allow some bleed off. Remember the arm does NOT push the plunger up. It only limits how far it can drop. So in reverse, the rod acts in the opposite way and pushes up. If there is no free play in the rod when parked then clearly going in reverse means that max pressure is always going to go the back wheels. Ideally then I guess, there should always be a little movement in the rod both up and down when level. When you do a giant lift the rod does need looking at as you may not have enough adjustment for your set up. You can bend the rod quite easily if you need to so it has a bit more dip in it.
My plunger had not only siezed so it didn't bypass at all, but had blocked so fluid didn't pass through it either.