When used in a close combat attack, does the object modify your damage and in that way preventible by the Outsiders TA? or is it just an addition to your damage, and just increases the damage similar to a critical hit?

It is the first one. (It used to be the second one, but that is no longer the case.)

Ok so if I were to Outsider the new HSS Spiderman, he could move his full movement for HSS but wouldn't gain any additional damage from a held object? hmmm oh well, back to the drawing board lol.

Correct.....

ok thanks.

If you are playing Golden Age, you could always try using the Soda Machine or Mailbox. While Outsiders would prevent the modification to damage value, those two objects also modify damage dealt by +1. Since damage dealt is not a combat value, that particular modifier would hang around and help out Spidey.