The brake holds the load. To test the brake I install the winch in something, run a snatch block over a stout tree limb and pick up a log or something (front end of your vehicle or another vehicle if you are brave.
When in free spool it can be hand spun forward and back. It can also be powered in and out and if you hold the drum it will not spin the drum. That is how it should work in free spool.
CORRECT
My question is when it locked. What holds the weight when locked and powering in and out? I don't...
I think that you are supposed to use machine oil on the part of the free spool cylinder that slides against the gearbox housing. You are supposed to periodically re-oil the surface through the freespool knob hole, after removing the knob.