Faults are complex systems embedded in an evolving medium fractured by seismic ruptures. This off-fault damage zone is shown to be thermo-hydro-mechano-chemically coupled to the main fault plane by a growing number of studies. Yet, off-fault medium is still, for the most part, modeled as a purely elastic-hence passive-medium. Using a micromechanical model that accounts for dynamic changes of elastic moduli and inelastic strains related to crack growth, we investigate the depth variation of dynamically triggered off-fault damage and its counter-impact on earthquake slip dynamics. We show that the damage zone, while narrowing with depth, also becomes denser and contrary to prevailing assumptions continues to act as an energy sink, significantly influencing rupture dynamics by stabilizing slip rates. Furthermore, we observe that damage formation markedly reduces rupture velocity and delays, or even prevents, the transition to supershear speeds even for a narrow damage zone. This underscores the critical need to incorporate the complex interplay between the main fault plane and its surrounding medium across the entire seismogenic zone. As a proof of concept, we introduce a 1D spring-slider model that captures bulk elastic variations, by modulating spring stiffness, and normal stress variations that emulate changes in bulk load. This simple model demonstrates the occurrence of slow slip events alongside conventional earthquakes, driven by the dynamic interaction between bulk temporal evolution and fault slip dynamics, without necessitating any changes to frictional properties.