Will only activate if a hit is taken (even from 0 damage) from the front with your weapon drawn.
All defensive job abilities and skills (except potentially Shield) must be exhausted before Retaliation will take effect, and Retaliation will not negate or otherwise affect damage taken.
Unlike Counter, you gain TP from both the Retaliation swing and the damage you take to trigger the swing.
You can gain weapon skill ups from Retaliation attacks.
Currently unknown if anything affects the activation rate. The base rate seems to be 40-50% before hit rate.
Appears to have similar movement decrease as one "Dusk" equipment (e.g. Dusk Gloves).
Retaliation is considered slashing damage even if wearing a non slashing weapon such as a polearm. There is some debate on this topic: (see testimonials)