Agency is where OTA acts as an agent between customer and lodging supplier. The OTA takes a fee and/or percent cut of the booking. Usually the customer pays the hotel directly upon checkin, and the hotel in turn pays the OTA.
Booking.com uses the Agency model and they dominate Europe. Expedia is strong in North America and struggles to get a foothold in other regions.
Expedia now uses the agency model and merchant model. Europeans understandably do not prefer to pay for the hotel stay at the time of booking.
There are more nuances, but that is basically how it works.
I do not understand the obviousness of "understandably". Seems like a likely culture difference. Explain?
What Booking.com is really excellent for is that it just works and that it takes away a lot of the stress when traveling. Just by filtering on 8+ -rated reviews and by your desired nightly pay and you're sure to get what you want, no hidden gotchas, no anything.
These are all the reasons to just avoid booking.com. The whole site is like a shady used car salesman - for example returning search results that say -"You just missed it", then why tell me about it? Or "5 people looking at this right now", seriously who cares? Do people really liked to feel pressured? Or how booking.com returns properties with the red "sold out!" in search queries for hotel rooms? Booking.com is one of the most miserable user experiences on the internet and the UI? What a total 1990s looking shit show that is. And of course the reviews seem dubious as you mentioned.
I've been burned by them more times than I care to admit and prepaying means you are stuck with it.
Had I taken a closer look at the patterns of reviews (as I've learned to do with Yelp), I would have realized the preponderance of fakes. Ratings are all over the place. Numeric scores are inconsistent with comments. Vast majority of 8+ reviews are one-time reviewers, and a bad review is immediately followed by multiple high reviews the same week.
In the Booking.com case, the primary photo is phony (a different property -- room is wrong configuration). Many reviews refer to nonexistent features. The few negative reviews paralleled my experience very well (this place was a D-I-V-E, by far the worst I've stayed in anywhere in North America).
Disclosure: I work for Booking.com albeit neither in the hotels facing department nor customer service. Managed fraud ops and security ops and eng years ago. Do not speak for the company.
Their search by map or whatever is called it's actually pretty handy. It keeps the filters you have already selected on (which is a big thing in this day and age) and you can "travel" through the general area you're interested in staying, showing the prices on map-pin mouse-over, if I remember correctly. I tried doing this on GMaps directly and the experience was clearly inferior (no clear way to filter for price and rating, a lot less available properties), or maybe Google has another travel-like interface of which I don't know anything about.
I admit, there are tons of dark-patterns, some of which you mentioned, but I got used to them and learned to ignore them, the same as I do with online ads.