What happens is the nut comes loose allow the strut free movement in the shaft, a big enough bumb will crack the housing and the pressure seal will break.
If the shock is bouncy, well i should say if the suspension is bouncy, the shock is compressing into the housing and then not returning at a rate that matches the spring.. hence the bounce... its literally bouncing on your spring until the inertia is gone and it settles again.
Use lock tight (stud lock) on it and tighten with a large Stilton wrench... you'll most likely need a new shock too.
aZk.