If a Seneschal is damaged by an AOE attack and the attack destroys other friendly Protectorate models, does Restoration remove the damage suffered?

Yes. The damage from the AOE is dealt to all of the models before any of them are destroyed. Once all the damage is dealt any models that suffered sufficient damage to be destroyed, are destroyed; the Seneschal is knocked down at this point.

Restoration triggers now and will give the Seneschal wounds back. More.

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