Lower values seem to cause more damage but only thru thin walls, high values cause 0 damage. Also, the necessary value doesn't seem to depend on the actual thickness of the wall - curved and straight walls behave differently.
No matter what value, i can't shoot thru two thin walls (the two glasses on destructive above bases).
I would expect the value to affect the maximum thickness and the damage would decrease with distance or something similar.
Did some more testing: the damage dealt seems to be higher the thicker the wall is. Also, my distance to the wall seems to affect it - when i stand too close it does no damage (but not so close the crosshair is blurred).