Banefire checks the number you chose for X, not the amount of mana you actually spent.

Banefire can be targeted by spells that try to counter it (such as Countersquall) regardless of what the value of X is. If X is 5 or more, those spells will still resolve, but the part of their effect that would counter Banefire won’t do anything. Any other effects those spells have will work as normal.

Banefire’s ability won’t prevent it from being countered by the game rules if its target has become an illegal target.