What is the gate valve for and how should it be set?

It is called the bypass. It gives the water somewhere to go when no heating
is called for. This would happen if all the TRVs shut off and the diverter
is on heating. It happens more easily on S-plan when all the circuits can be
turned off.

It is set through voodoo magic. Alternatively, replace it will an automatic
bypass valve, which only opens when it detects too large a pressure
differential.

Christian.

P.S. Why did you replace your condensing boiler with a less efficient one?