Is a displacement of the medial meniscus root a tear? what kind of damage is being done every time the knee clunks?

Something slipping: In the knee there is both a medial meniscus and a lateral meniscus. The meniscus is cartilage and it can tear and it can slip. Slipping can be felt as you suggest but other things can cause a clunk like the patella - the kneecap. Imaging studies can actually show slippage. Does your knee lock. Locking is a common complaint of meniscus tears. To tell if you have damage you need evaluation.

Usually does: Displacements of meniscii usually happen after a tear of its attachments or injury to its substance. In either case it can be symptomatic and needs to investigated as the treatment depends on the findings.