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I think you're discounting the fact that whenever ANY model is reduced to zero wounds/HPs then they're removed from the board as a casualty (superseding unit type). The rule you're confused about is basically stating that a non-Gargantuan Creature unit will take wounds equal to it's total current wound count, but a Gargantuan Creature can't suffer that effect. Instead it suffers only D3 wounds, BUT if it's reduced to zero wounds from this effect, it's still removed from the game as a casualty as per the normal "death" rules for units.
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