Springs absorb impact but oscillate; the damper turns that energy into heat so the body settles fast.
As the piston moves, oil is forced through small holes and valves - throttling resistance. A smaller flow area means more damping.
Damping is roughly proportional to piston speed in the low-speed range - exactly what suppresses high-speed impact.
The strut bearing at the top supports the rod and pivots steering - it takes repeated axial and rotational load.