But I think I remember enough to make a W.A.G.

Letting any mass fall unhindered converts gravitational Potential Energy completely to Kinetic Energy of motion, the fact that it is slowed down indicates some of that kinetic energy is being used up, since it won't reach the speeds necessary to fully convert PE to KE completely. I.e., some energy is unnacounted for.

However, you can slow a mass by providing a force in the opposite direction (like dropping a ball bearing into a viscous fluid). In this case, some of the PE is lost to friction, i.e., heat, and is dissipated in the fluid. My guess is the electrical forces that slow the magnet down generate heat in the copper pipe and in the magnet itself. IOTW, you don't use energy to slow it down, but some the PE used up is transferred to heating the metal and is not transferred to the falling body so it can't speed up. The magnetic field interacting with the metal pipe acts as the viscous fluid, draining KE out of the system.

As for the capillary action, that is caused by the electrical forces in the water molecules. Water exists as a bunch of OH- and H+ ions and H2O molecules flying around together, briefly associating into the complete molecule and then disassociating again. That's why its such a good solvent. These flying ions bump into other matter and wedge into them and break them up into smaller pieces.

Somehow, (not clear exactly on this), the ions interact electrically with atoms in the fibers or capillaries and it drags itself along them. The energy to push them along must come from the thermal energy in the water, which cools slightly as the thermal motion pushes the water in one direction. If the capillary is too big, or the fiber mesh too coarse, there isn't enough surface area interaction to allow enough ions to overcome gravity using only the meager energy in the water.

It should be easy to look this up, but I'm too lazy to do it, and its more fun to guess. My guess is Podrock still remembers enough of his chemistry to judge my answer.