The question is not easy, so i will try to be as clear as possible

1- Solo Game

2- Agnes have 7 horror and the Goule Priest have 4 damage

3- Agnes take an horror damage (from card ability etc ...)

Agnes capacity :

[Reaction] After 1 or more horror is placed on Agnes Baker: Deal 1 damage to an enemy at your location. (Limit once per phase.)
[Elder Sign] effect: +1 for each horror on you.

This reaction is triggered just after the horror is placed.

In the Reference guide, we also determine if an investigator is defeated after the horror placement.

So which one come first ? Did the first investigator decide ?

If the Agnes capacity is first triggered, i deal the damage to the Goule priest which will die. Now new Questions

The act 3a of the Gathering is :

So What happen :

1- Agnes is insane first, end of scenario => bad conclusion happen

2- The goule priest is killed first but agnes is insane before the passive objective effect trigger, end of scenario => bad conclusion happen

3- The goule priest is killed first and the passive objective effect trigger, end of scenario => good conclusion happen

4- The goule priest is killed first, the passive objective effect trigger, end of scenario then Agnes become insane => good conclusion happen + a Trauma for Agnes

5- Please stop with your silly questions

6- As proposed by vilainn6 : Take the bad conclusion without adding the Ghoul Priest to further scenario the more thematic solution

Take the bad conclusion without adding the Ghoul Priest to further scenario? That seem the more thematic solution.

Take the bad conclusion without adding the Ghoul Priest to further scenario? That seem the more thematic solution.

So we have a 6- now

From the Rules Reference:

=A ability with a triggering condition beginning with the word “when...” may be used after the specified triggering condition initiates, but before its impact upon the game state resolves.

=A ability with a triggering condition beginning with the word “after...” may be used immediately after that triggering condition’s impact upon the game state has resolved.

According to the rules, since the ability starts with the word "after" instead of "when", the impact on the gameplay of placing horror on Agnes must be fully resolved before triggering that ability. Since resolving that means she is eliminated from the game, she is unable to use that ability to do damage, thus the Ghoul Priest is NOT killed and you get the bad conclusion with no bonuses for killing the priest.

So in your list, option #1

Yes but from the rule reference guide Dealing Damage/Horror follow two steps :

Dealing Damage/Horror
There are two types of afflictions that may beset an investigator
in the game: damage and horror. Damage afflicts an investigator’s
health, and horror afflicts an investigator’s sanity.
When an investigator or enemy is dealt damage
and/or horror, follow these steps, in order:
1. Assign Damage/Horror: Determine the amount of damage
and/or horror being dealt. Place damage and/or horror
tokens equal to the amount of damage and horror being dealt
next to the cards that will be taking the damage/horror.
==When an investigator is dealt damage or horror, that
investigator may assign it to eligible asset cards he
or she controls. To be eligible, an asset card must
have health in order to be assigned damage, and it
must have sanity in order to be assigned horror.
==An asset cannot be assigned damage beyond the
amount of damage it would take to defeat the card,
and cannot be assigned horror beyond the amount
of horror it would take to defeat the card.
==All damage/horror that cannot be assigned to an
asset must be assigned to the investigator.
2. Apply Damage/Horror: Any assigned damage/
horror that has not been prevented is now placed on
each card to which it has been assigned, simultaneously.
If no damage/horror is applied in this step, no
damage/horror has been successfully dealt.
==Abilities that prevent, reduce, or reassign damage and/or
horror that is being dealt are resolved between steps 1 and 2.
==After applying damage/horror, if an investigator has damage
equal to or higher than his or her health or horror equal
to or higher than his or her sanity, he or she is defeated.
When an investigator is defeated, he or she is eliminated
from the scenario (see “Elimination” on page 10).
==After applying damage/horror, if an enemy has
damage equal to or higher than its health, it is
defeated and placed in the encounter discard pile
(or in its owner’s discard pile if it is a weakness).
==After applying damage/horror, if an asset has damage equal
to or higher than its health or horror equal to or higher than
its sanity, it is defeated and placed in its owner’s discard pile.

@ step 2 the horror is placed and only then we have to determine if the investigator is insane.

" ability with a triggering condition beginning with the word “after...” may be used immediately after that triggering condition’s impact upon the game state has resolved."

The impact upon the game state of placing horror on Agnes is not resolved until you determine/resolve whether she is defeated. If her ability started with "when" instead of "after" then you could use the ability before determining whether she is defeated and the Ghoul Priest would be killed and you could claim the good ending. Specifically because it says "after", you are not able to. The wording is very clear. Agnes would be defeated before being able to activate her special ability. Her ability cannot be used to do a final damage before being defeated.

"after" means you have to resolve all of step 2 in applying damage

"when" would mean you could interrupt the process and deal the damage even if she would be defeated

Agnes' ability starts with "after" - thus she cannot use it when taking the Horror would defeat her

Thanks for the detailed answer

No problem. I see it as clear in the rules, but no skin off my nose if you choose a different solution. Main point is to have fun.