Your gear will get damaged in V Rising when you are out fighting enemies and when you die. It's important to keep your gear in good quality to give yourself the best chance of surviving the day. Here is how you repair your gear.
You'll know when pieces of your gear are damaged when an icon appears above your blood pool of that shows its remaining quality. The gear piece will appear as yellow at first and then turn red when the durability is extremely low. To repair your gear you will need to open your inventory (tab) and hover over the damaged item.
Hovering over the item will show you its remaining durability and the materials required to repair it. If you have the required materials, you can repair the item by pressing the middle mouse button, as indicated by the button prompts at the bottom of the inventory screen.
Your gear is primarily damaged from dying out in the world, it is important to keep your gear quality high to tackle some of the harder challenges in the game. Consider replacing old gear with higher quality gear if possible rather than repairing it to save the material cost.