lua_baselib.c

* Takes function(player, mo) input.
* Return TRUE for stating that yes, the player is in a state that can cause contact damage, do with that what you will.
* Return FALSE for stating that no, the player is weak and vulnerable and cannot cause contact damage, do with that what you will.
* Return NIL for allowing the function to continue regular operation.

Fills a different ideological niche than ShouldDamage - that's for determining whether damage dished between two objects should happen, this is for determining which way around damage should be dished when considering a player-object interaction.

Or, in other words, think of it as "ShouldDamage is whether damage that has been requested should be granted, for object-object interaction, while PlayerCanDamage is for whether global player properties should cause damage to enemies and monitors in the first place, like spinning, hammering or stomping."