The mechanism is plastic deformation of metals, it's a similar (in effect) process to cold drawing alloy cylinders with a massive press pushing onto a disc of ali alloy. The pressure gets to a point where the alloy turns plastic and just flows back up the punch - very weird to watch in operation.
If you get up over a certain velocity and energy level, the metal just deforms and flows around the thing hitting it. It's the effect for which the sabotted tungsten anti-armour penetrators are designed to achieve 'kills' on armoured vehicles.
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