In one of our last games appeared the following rule problem:

Foundations of Stone, Stage 4; One player lost 1 hero due to death and 2 cause of the treachery which shuffles a hero back in your own deck.

Since FAQ 1.4 says that in such situation a player is not out of the game we couldnt find out where to put the undefended damages to.

Even if that damage is moved to the remaining allys and they all die, regarding the FAQ the player is still in game, but what happens?

hmmmmmmmmmmmm

Just my $.02

I would say that enemies engage that player like normal and attacks that go undefended are just a wash and any remaining allies are free to attack back.

"An enemy remains engaged with a player until it is defeated or until a card effect returns it to the staging area, engages it to another player, or removes it from play."

i cannot remember ever seeing a passage that says undefended attacks ever go to allies. in fact it is sometimes beneficial to play this strategy

rich