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How many damage counters does a character in the KO area have?

A KO’d character has damage counters on it equal to its health. Note that this is true even if it took more damage while on the battlefield. For example, if a character with 7 health takes 10 damage, it ends up in the KO area with 7 damage counters. If you return it with I Still Function!, it will end up with 6 damage counters.
Source: Wizards of the Coast (2018-10-11)    【Link to Ruling】
Tags: I Still Function!