Pointed Discussion

That ruling has to be incorrect now. Since Shadowmoor introduced the +1/+1 and -1/-1 counters cancelling each other out as a state-based effect, there would be no +1/+1 counters on this guy to move.

That's not true - the ruling is correct. If a creature with +1/+1 counters receives enough -1/-1 counters to reduce its toughness to 0 IN ONE GO (ie. Arcbound Worker is hit with a Distill Infection), then two state based actions are checked at the same time the next time a player gains priority: a creature with toughness 0 being sent to the graveyard, and +1/+1 and -1/-1 counters cancelling each other out. As the creature is sent to the graveyard at the same time the counters would be cancelled out the game still sees it as having had an appropriate number of +1/+1 counters, and as such they can be moved via modular.

Ooooooo proliferate.

One of the best 1 mana 1/1 creatures.

All these arcbound cards work nicely with a bit of Fate Transfer. Especially against some of those nasty hydras. I'm talking about you, Primordial Hydra.