Context

       -> It actually does!

Test

In the following two tests, 4 cards were used:
Holy Shield, Celestial Armor, Markus the Fallen and Tidal Wave.
Here are three different versions of Holy Shield to highlight the fact that the phrase "can't be killed" was removed from the previous version, which led to confusion with the current one that no longer mentions it.

Holy Shield (1st Version)	Celestial Armor
Ability: Target cannot be harmed until the start of your next turn	Ability: 2SE: All damage to target friendly ally is reduced to 0 until the start of your next turn.
Holy Shield (2nd Version)	Markus the Fallen
Ability: Target friendly hero or ally takes no damage and can't be killed until the start of your next turn.	Ability: 3SE: Target friendly ally is killed: target opposing ally is killed.
Holy Shield (Current Version)	Tidal Wave
Ability: Attach to target friendly hero or ally. When that hero or ally is dealt damage, that damage is reduced to 0 and Holy Shield is destroyed.	Ability: All allies are killed.

Test 1

• Verifying that Holy Shield protects the ally it is attached to from being instantly killed.

1. Image 1 & 2: Friendly ally in play and targeted by Holy Shield.
2. Image 3: Friendly ally with Holy Shield attached to it, without mention of Holy Shield's ability on the left.
3. Image 4: Friendly ally with Holy Shield attached to it, targeted by Markus' ability, just before targeting the opposing ally.
4. Image 5: Markus with three fewer SE points; opposing ally killed + discarded, and friendly ally still in play, thanks to Holy Shield protection now discarded.
   

• QED of Holy Shield's protection from instantly killed targeting activated ability.

Test 2

• Verifying that Celestial Armor ability prevents ally to be instantly killed.

1. Image 1: Friendly ally and Celestial Armor in play + Tidal Wave in hand.
2. Image 2, 3 & 4: Activation of Celestial Armor's ability and friendly ally targeted + opposing ally in play.
3. Image 5: Ally with Celestial Armor passive ability mentionned on the left.
4. Image 6: Markus with 2 SE points fewer and Tidal Wave summoned.
5. Image 7: opposing ally killed and discarded and friendly ally still in play.
   

• QED of the protection of Celestial Armor's ability from instantly killed summoned ability.

Explanatory Development

The issue was as follows:
Now that the wording "Can't be killed" has been removed from the game:

1. Does the current Holy Shield ability, "When it is dealt damage, that damage is reduced to 0", protect the ally from being instantly killed?
2. Are there any other ways to prevent an ally from being instantly killed by an ability?
   
   

From the previous tests, the answers are:

1. YES. It appears that the wording "All / That damage is reduced to 0" prevents an ally from being both killed and instantly killed.
   • This was tested with Holy Shield, Celestial Armor and Decoy Trap abilities.
2. Other methods are situational:
   • Enchanted Oak:
     • As described, the ally will be protected from an instantly summoned kill ability (e.g., Now You're Mine, Tidal Wave), but not from an ability that is already in play (e.g., Boris Skullcrusher, Markus the Fallen, Winthill Assailer).
   • Stoneskin:
     • Stoneskin will protect any ally it is attached to from targeting abilities (e.g., Boris Skullcrusher, Now You're Mine, Markus the Fallen, Winthill Assailer) but will not protect from non-target abilities (e.g., Tidal Wave, Crescendo, Curse of Death, Hit and Run)
   • Cinderborn Fatebreaker:
     • As described, Cinderborn cancels any summoned abilities with a cost of 3 or less with its life.

Moreover:

• If the ally has the shroud passive keyword ability:
  1. Yes, it is protected from any targeted instantly-kill abilities (e.g., Boris Skullcrusher, Now You're Mine).
  2. No, it is not protected from non-targeted abilities (e.g., Tidal Wave, Crescendo, Curse of Death).

Conclusion

From the previous two tests, we can now conclude that:

• The wording "All damage / When dealt damage, is reduced to 0" prevents the target from being instantly killed. This makes the following rule italicized from the rulebook on page 16 obsolete:
  

DAMAGE - When an ability or effect causes an ally to be instantly killed, that ally is dealt enough damage to drop its health to zero (rendering any kind of damage reduction ineffective).

• To initially answer Halbard's question: is it normal Decoy Trap's ability to be triggered when a friendly ally is killed with Markus' ability?
  • -> Yes it is, with the previous balanced changes, this behavior is now expected.