Why does a slight shift toward larger hail raise damage so much?

Answer: Larger ice stones carry more mass and deliver more impact energy.

Larger ice stones have sharper edges and cut into surfaces more deeply. — No. Sharpness is not the main reason damage grows, though a sharp edge can concentrate force on a small contact point and cause cuts or punctures. Hail damages roofs, cars, and crops mainly through each stone's mass and impact energy; larger stones are not necessarily sharper, and a small stone with a sharp edge still carries little force.

Larger ice stones carry more mass and deliver more impact energy. ✓ — Correct. Damage rises steeply with hail size: for the same number of stones, a larger stone has more mass and hits with more impact energy, so roofs, cars, and crops take a harder blow. Hail grows by collecting supercooled water in strong updrafts, so a storm that shifts even slightly toward larger stones can do much more damage.

Rain around the hail absorbs impact energy and softens the blow. — No. Rain does not absorb much of the impact energy from hard ice, though rain and hail often occur together and the rain curtain can make a storm look messier. What damages roofs, cars, and crops is the hailstone's own mass and speed; nearby rain does not soften a large ice stone or hold it up.