Am I correct in thinking that with Energy Absorption you can use the extra dice for Strength to try and lift something heavier than you normally could, but you cannot use the extra dice for Strength to increase your slugfest damage?
That is correct, as long as the GM allows for a STRENGTH roll for you to exceed the normal limit (as mentioned on page 18 of the Core Rulebook). The bonus die can be used on attribute rolls with any physical attribute on your next turn.
Co-Creator of Free League Unbound | Writer / Designer for Invincible – Superhero Roleplaying