by Dormammu
We discussed this because it's almost guaranteed to come up every game when fighting Stage II Black Goat. When he starts doing 1 damage to everything within one space, he will quickly have all six Dark Young around him dying and respawning. So the order matters a lot: are there always six in his space or are there down turns with fewer?I feel the answer is actually pretty clear when you read the steps to resolving a roll.
1. Apply successes. In combat this is damage. I believe wounds are applied and killed models are removed in this step.
2. Apply results of the roll. Examples given include effects that come from things being killed. This is why I believe killed models are removed in step 1. So in this phase, the damaged Dark Young will trigger its ability and return the killed model to the board.
3. Apply sanity losses, trigger insanity, gain skill increase, in that order.
Based on the wording of step 2 and that it specifically all happens after step 1, I am quite confident that the model returns to the board in your example.
Note also, I find players tend to mark sanity taken right away before resolving rolls. It's good to remember this is wrong because it can matter a lot. Returning to your example, if you hit a sanity breakpoint with Psychotic Outbursts or Pyromania, you would apply the results after the fresh spawn was placed in step 2.