The valve in question is the fuel bypass valve which should limit the pressure to the fuel filter to approximately 15 psi. This value is from a D330 manual, not the D330c, so there may be some difference there.
There should be a hose connected to the bypass valve that returns to the tank. The supply line to the primary fuel strainer is the only other normal connection to the tank. The small bleed line from the upper filter bleed valve usually just dumps on the ground, though it could certainly be routed back to the tank if desired for a stationary application such as a generator.
If your bypass valve is stuck or has trash in it, it will not maintain the correct fuel pressure, but it must be in place to limit fuel pressure developed by the gear type transfer pump. I am not sure having the fuel pressure being low would prevent an engine from revving up with no load, but I would start there and if it still won't speed up properly, then consider the governor and injection pump rack might be stuck or the governor severely out of adjustment.
D2-5J's, D6-9U's, D318 and D333 power units, 12E-99E grader, 922B & 944A wheel loaders, D330C generator set, DW20 water tanker and a bunch of Jersey cows to take care of in my spare time😄