I don't understand this. Aren't both valves fully closed for the entire compression stroke and then the entire power stroke? Or at least almost all of both of those strokes?
Depends if the engine is starting or running. The problem is because they use a weaker starter than one that can over the full compression. This is why you can't depend on the compression numbers while cranking as they will be nearly half of the actually engine compression. The leak down test is better at determining cylinder condition.
TDC compression is at the very end of compression stroke just as it enters the power stroke. What Briggs and others are doing is slightly opening either the intake or exhaust valve (depending on design) to lower cranking pressure slightly before TDC compression stroke. Once the engine starts the ACR swings out and the engine goes to full compression. Some older engines actually a camshaft grind that did this via a bump or ramp on one the camshaft lobes but that always had some compression bleeding off.
When the mechanical compression release is used you must be off it in order to adjust the valves; hence, the 1/4" down pass TDC compression method but many of us find it just easier to do it the old way instead finding a measuring stick every time we need to adjust the valves.
ACR = Automatic Compression Release
TDC = Top Dead Center