Quote Originally Posted by tiornys View Post
I think the "best" interpretation by RAW is that it removes insubstantial some of the time.
By RAW, Insubstantial is a trait that is factored in at a different time than resistances and immunities (from the half damage note "When a power or other effect deals half damage, first apply all modifiers to the damage, including resistances and vulnerabilities, and then divide the damage in half (rounded down)." combined with the description of Insubstantial "When a creature is insubstantial, it takes half damage from any damage source, including ongoing damage. See also half damage."). The fact that it is mentioned on the Resist portion of an NPC's entry is simply a method to ensure that people remember it and that it takes up way less space. Pre-MM3, it was mentioned separately as a trait but it becomes kind of onerous when you have to include the same entry over and over for the *same exact thing* especially whenever the keyword already exists to explain it.

For more evidence, check out the wording of "resistance" and "immunity" which both refer say that it has to refer to a specific damage type and a specific amount (you don't get "insubstantial all" or "insubstantial fire" like you do with resistances and immunities; it's just "insubstantial").

From a gameplay perspective, the reasoning is pretty simple: creatures that are constantly insubstantial tend to have their hp significantly reduced compensate for it (Raaig Crypt Lord is a level 14 soldier with 96 hp and insubstantial; MM3 math would put a level 14 soldier at 140 hp). Getting rid of insubstantial is *way* more potent than getting rid of resistances or immunities (which are only really useful against hyperspecialized opponents that deal only a single type of damage).