What is this slideout part for?

[myredracer]

This is on one of the slide shafts in our TT. What is it's purpose? It is adjustable but has no jamb nut and can freely rotate. Is it a stop to prevent the slide from going in too far or is it a seal to prevent rodents and insects getting in the underbelly?

Hard to see in this photo but it looks like someone has taken a heavy hammer to the lip facing the frame and whacked it in several spots. Is this from the slide being tossed around on bouncy or rough roads? If it is a stop, how would you adjust it?

[SCClockDr]

It is the frame stop. It should just contact the frame with the slide fully seated. If set closer to the frame the slide may refuse to deploy. If set further away from the frame a gap will remain when fully seated.
To adjust, strap wrench the cup and loosen the nut visible in your image. Once the jam nut is loose the cup should turn by hand. Then just lock the nut tight to the cup to finish.

Regarding the damage, when seated and traveling, gravity keeps the slide seated. In rough conditions centrifical force can overcome the gravitational advantage and cause the slide to tip out at the top then slam back down. This could have caused the damage shown. Some manufacturers provide a travel brace to place between the inside flange and the wall to prevent tipping. It MUST be removed prior to deployment or serious damage can occur.