Counterintuitively that’s the definition of healthy in economics.

If you don’t have busts, at some point your system will abruptly/violently cease to exist.

It is a negative feedback loop, so yes, it makes systems stable.

Technically you could have negative feedback result in a system that diverges further and further from some baseline, until it eventually collapses. This is usually because the gain of the feedback signal is too high.

This is exactly how real world economy is (ideally) meant to work.

Regression to the mean. The alternative is no adjustment at all.