I can't seem to find anything that addresses the 0 DEF issue. As such, I would have to say nothing happens to that Hero if his DEF is reduced to 0.
Huntik Comp Rules:602.2 Then, starting with the attacking player, each player aims his or her attacks at enemy heroes or obstacles in combat. A player’s total number of attacks may be divided between any number of enemy heroes or obstacles in the combat as he or she chooses. The number of attacks aimed at each hero or obstacle must be a positive integer or 0, and must add up to the player’s total number of attacks.
602.3 Then, each hero or obstacle with attacks aimed at it equal to or greater than its DEF value is KO’d (see section 400.11e) simultaneously. This is called “being KO’d by combat attacks.”
Those lines lead me to believe you are correct. That hero would be KO'd by combat since an attack was aimed at him with a value equal to or greater than its DEF.
Simon Key
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