If Thousand-Tailed Watcher (which reduces enemy Might by 3) attacks Tibbers (7 Might base, deals 4 damage when blocking), does Tibbers deal 4 damage or 7 damage in combat?

Ruling: Tibbers deals 4 damage because its Might is reduced to 4 by Thousand-Tailed Watcher's effect (7 base Might - 3 from Watcher = 4 Might). Tibbers dies and Watcher survives the combat.