This phrase is ambiguous: are the words confusing or is someone confusing them?
Here are three words that I believe are confusing because they sound similar and have overlapping meanings:
damp, dampen, tamp
The easiest on both scores is tamp. It has an initial consonant different from the other two and its meaning implies the application of movement and force. You tamp down a wad into a rifle barrell or you tamp down the covering on a dish you are cooking.
To damp something means to reduce its force, to restrict it. Sound can be damped and we can damp the level of excitement in the room.
Dampen requires water, so in some ways it is actually further removed from the central meaning than is tamp. It means to make something slightly wet.
The overlap among these three lies in the sense of reducing the level of activity. You can damp down the excesses engaged in by a rowdy party or crowd, and “down” is usually used with ’damp’ in that sense. Some speakers associate damping only with industrial uses but its metaphorical transfer is an easy one to make: if you can damp the level of dust in the hair, or damp it down, then you may do the same with tamp. You are tamping something down, in this case the level of excitement or rowdiness.
Dampen in the same party or crowd context leads us to the phrase ’wet blanket’. If you dampen a fire, i.e. put water on it, you lessen the amount of flames, heat, and maybe smoke. Water is required for any use of dampen.
What all three words have in common is similarity in sound and spelling plus a general meaning through metaphore of reducing the level of excitement. No wonder people confuse these words.