no - the disavow tool is meant as a last resort to be used if you have attempted to remove backlinks but your requests have not been fullfilled by the webmasters.

If you have bad backlinks you have to get them removed first or atleast attempt ot remove them and have proof. If you have done that and have proof, then use the disavow tool as a final resort with your reconsideration request proving that you removed links, and for those that you didn't you submitted them to be disavowed.

No it is not like that, you can disavow links which you feel makes your website degrading. But it should be used correctly. Just have a look at the the below quoted statements by google.

"This is an advanced feature and should only be used with caution. If used incorrectly, this feature can potentially harm your site's performance in Google's search results. We recommend that you only disavow backlinks if you believe you have a considerable number of spammy, artificial, or low-quality links pointing to your site, and if you are confident that the links are causing issues for you."

Well how do you define a bad link?