Punch needle loops stay in place by the threads of the fabric. With every punch that you make you basically push the bordering threads aside to make space for your needle. And once you make your next punch your automatically move back the threads interlocking the previous loops. As you continue to fill your piece with loops they are getting more and more locked in the threads of your fabric.
Suitable fabric can deal with the harsh punches from your punch needle. You should always be able to undo and redo pieces as you go, withouth having damaged your fabric.
If a fabric is too open woven your loops will pull out easily. And if a fabric is too closely woven, you will feel a lot of tension on your hand as you have to push your needle through the fabric. The weave of your fabric also makes a difference for your punch needle experience. Some fabrics break easily when you punch through. Making it impossible to redo a section.