Welcome to Permies Hannah!
Personally Im a big fan of covering wood with dirt, especially in areas that have poor nutrient availability or abused soils. Its a great way to quickly add organic matter and carbon, which help create those conditions for happy growies.
Organizing logs lengthwise across contour lines in a way that slows, sinks, and spreads water into the directions we choose can help capture and retain both moisture and nutrients, especially if combined with a diversity of living roots and green covers. This is a basic step that can be taken without worrying about too much labor inputs. Laying logs down, and spreading seeds to get something green capturing solar energy and injecting liquid carbon into the ground. More diversity of plant families interacting through root networks can help to unlock nutrients from varying depths that even soil tests won't show.
Adding amendments can be tricky because it can be easy to overdo it. Too much of one thing can make another less available.
I like the Biology over Chemistry approach myself, but I do still acknowledge that some amendments might be necessary in some contexts. It depends on what your goals and intentions are.
What "weeds" or other plants are naturally showing up on their own? This could help us get clued in on what's going on with your unique ecosystem.
What is your geology? Do you know the history of your land and how it has been used over time?
hannah lpro wrote: My questions are: Will it improve the soil below even if I don't plan to plant onto the berm itself? Can I put the berm outside the fenced in garden and will it actually hold back enough water? Is it worth it? It seems like a lot of labor.
So, to answer your questions more directly, I think that soil can be improved without planting, but planting improves it more. Holding back water is a matter of diversion and storage in relation to flow rates.
What are the record rain events for your area? How much water coming down the mountain is the potential, and are there barriers that can be made with less effort using a combination of trenches, and slightly off-contour swales, berms, or terraces? Where can the excess water be moved to, without loosing it?
Water is life, after all.