Canon damage is when a canon is viewed differently by the audience from its original release. Some examples are Uncle Tom's Cabin, which was actually re-scripted by different people because they didn't like the message, or the Sonic Universe games, that have had their image irreversibly changed by saturation of badfic and bad art.

These works have been changed and patched since their release to the point where some meaning has been added, changed, or lost. These particular damages seem to have healed, and the canon has become stable. Nobody disputes them.

I would even venture so far as to say even a bad translation or adaptation would damage a canon, and if the canon can't heal... its meaning to the audience changes. A good example would be Final Fantasy 4. It had a horrible translation, and if it hadn't been re-translated later then it would have been stuck that way. However, some items of the bad translation stuck, healed-over into in-jokes...