Living doll says whatever one is less though. So even if she dies she has 0 hp so 0 damage
Not true. According to the rulebook (under the Damage and Wound Tokens heading): "Wound tokens do not decrease a Phoenixborn or Unit's life. Life is constant unless changed by an ability." So her life would still be 3 (I think it's 3, I don't have the card in front of me).