Why does my Z axis slam into the bed every time it homes?

A break like that is the sneakiest version of this fault, because every test you do on the switch and the wiring comes back looking fine. I chased one on my old bed slinger for weeks. Switch clicked, cable tested good end to end, and the bed still drove into the frame every third or fourth home. Turned out to be a hairline crack in a solder joint right where the connector pins met the board. Everything after the plug was perfect, the break was the last half inch of the path. What finally found it was a continuity test with a cheap meter. Power unplugged, one probe on the signal pin and one on ground at the plug, press the switch by hand and listen for the beep. Then do the same test from the plug back to where the wires land on the board, flexing the area near the joint the whole time. On mine the beep would drop out for a split second when I put pressure on the board in just the right spot. Once I saw that I knew the switch and cable were innocent.

And your symptom pattern fits an intermittent connection perfectly. First the signal gets flaky, so the bed overshoots a little because the board misses the trigger for a few steps. Then it misses it more often, until one day it never sees the trip at all and just grinds into the limit. A half seated plug does the same thing since the pins only make contact at an angle. That gradual decline over weeks is exactly how these failures look in real life.

One thing worth knowing if anyone else hits this, most boards won't throw an error for a missing signal on a home switch. Mine never said a word, it just kept going until something mechanical stopped it. So don't wait on a warning light, the printer will happily self destruct before it complains. Reseating the connector firmly and putting a small zip tie strain relief on the wire bundle kept mine from walking itself loose again.

On mine it was the switch even though it clicked every time. The contacts inside were so worn the click was just the spring, no actual connection half the time. Easiest way to check without pulling anything apart is to unplug the connector at the board, put your meter leads on the switch side plug, and click the switch a bunch of times slow. If the beep drops out even once out of twenty presses, that switch is toast no matter how good it sounds. New one was a couple bucks and the problem never came back.

I'd push back on the part about gradual decline being the signature of a bad connection. Mine failed dead suddenly, no overshoot phase at all, bed went from homing fine one day to grinding into the frame the next. That was a loose plug at the board, same as the OP is describing. A connector tends to either make contact or it doesn't, it doesn't half make it a little worse each week. A mechanically dying switch is what gives you that slow slide. So I'd test the plug first, since that's the thing the OP actually found wrong, and treat the slow decline theory as a red herring here.

Still figuring this forum out so sorry if this is a dumb question, but I had somethig similar on my machine except the plug looked fine at the board. Turned out the crimp where the wire actually enters the plug housing was loose, so wiggling the wire itself was what made the contact drop out, not the plug in the socket. Might be worth a gentle tug on each individual wire going into that connector while you have it out. If one slides in and out even a tiny bit, that coud be your whole problem. Is that plug the type you can pop open and re-crimp, or is it molded?

Quick update — the problem was definitely the connector seating poorly in the board. It was a loose wire plug that wasn't making solid contact, which explains why the movement started failing gradually. Securing that connection completely fixed the issue and the printer is homing fine again.