The OE damper has a low-speed (as in low damper speed, not road speed) bypass circuit. Moving it by hand won't tell you much. This is a "feature" of the stock part.
I won't get into the fine details of it, but basically how it works is that at low damper speeds, the oil in the damper moves pretty freely though a small orifice controlled by a set of spring loaded check balls that bypasses the main (IE stiffer) valving. When there is a large and abrupt movement of the damper shaft (IE tankslapper), the bypass closes and the main valving comes into play.
This lets the bars move easily for low speed maneuvers, such as a U-turn but provides sufficient damping at large steering/handlebar "events" to keep things from getting out of hand. Literally.
To test this, SAFELY and PROPERLY (NOT with a jack under the header... :lol) support the front of the bike so the bars turn freely (or make it so there's no drag on the front wheel). Then turn the bars slowly from lock to lock. There will be minimal resistance. Next, yank the bars sharply as hard and quickly as you can back and forth. If the damper is working correctly, there will be noticeably more resistance.
:thumbup