I think it means that the merc suffered dexterity damage, perhaps from being shot in the arm/shoulder. Is there any way to fix it?

Cool thanks, I see now and have found info in the wiki confirming it. I have a merc with the paramedic skill, and when I set him as doctor then an option comes up about performing surgery or something. If you select that, then as opposed to simply healing the merc, the damaged stat also steadily heals, as long as the doc has a med kit.

Weirdly I can't find a way to similarly fix strength damage, which I believe some of my merc suffered due to an extended period of time without water and/or food.

As it turns out, thirst for extended periods cause strength damage, and yes it is possible to regain it through training. The problem though is that it's not really viable to try to obtain high stat scores through training, since the training takes impossibly long from about the 90s onwards. That's the problem I have, because my one merc (the bodybuilder firefighter) had 97 strength to start with, and is now down to 87. Several days worth of training (at the airport) couldn't even increase it by one. The only way I think to really get it up again, is through melee combat. Actually, come to think of it, it might be his low wisdom score. I read somewhere that wisdom influences the rate at which skills increase, but it would be weird if that was also the case for physical stats.

I'll be glad to share my save with you, but I don't know how? Any free and reliable file sharing site you can recommend? The save is about 5MBs.

Ah yes, unfortunately it takes ages to train attributes at these levels. In that case, I would just reload a previous save.

File hosting... I used Filesmelt sometimes, but now it does't seem to work properly. You could try with https://maxfile.ro/