Walker damage would be any damage that occurred as the crop mat passed over the walkers.  I would guess that most of the damage that could be classified as 'walker damage' actually occurs in the cylinder or at the beater, but doesn't come out until the crop mat is 'walked' over the walkers.  There could also be some damage to grain that gets pinched between the walkers, maybe, but I would guess that most of the damage occurs sooner and just hasn't fallen out of the straw yet.

Mike