I'll steer away from the over-emphasis of the "Unless the action increased the disabled character’s hit points blah blah blah" stuff and focus instead on this: "Healing that raises your hit points above 0 makes you fully functional again, just as if you’d never been reduced to 0 or fewer hit points."
First let me lay out four interpretations I see for a disabled cleric casting cure minor wounds on himself:
A)Start the round disabled.
Cast CMW on self.
Take 1 point of damage from strenuous activity.
Receive 1 point of healing from CMW.
End round on 0 hp, still disabled.
B)Start round disabled.
Cast CMW on self.
Receive 1 point of healing from CMW.
No longer disabled.
Take 1 point of damage from strenuous activity (casting spell while disabled).
End round on 0 hp, still disabled.
C) Start round disabled.
Cast CMW on self.
Receive 1 point of healing from CMW.
Since your healing has raised your hit points above 0, you're fully functional again, just as if you’d never been reduced to 0 or fewer hit points.
Take your other action -- move or standard (in the case of a quickened spell) -- since you're fully functional again, just as if you’d never been reduced to 0 or fewer hit points.
End round.
D)Start round disabled.
Cast CMW on self.
Receive 1 point of healing from CMW.
Since your healing has raised your hit points above 0, you're fully functional again, just as if you’d never been reduced to 0 or fewer hit points.
End round.
Option A doesn't seem accurate, since you receive the healing as part of the casting of the spell, and the 1 point of damage comes at the completion of the task.
Option D also doesn't seem accurate if you believe that "fully functional again, just as if you’d never been reduced to 0 or fewer hit points" immediately removes the disabled status and negates the effects it is currently imposing on you. Of course, you could make the argument that acting while disabled takes longer than acting normally, so you've used up your actions already and the round is then over. But that doesn't make for a consistent interpretation.
So we're left with Options B & C, and which one you take revolves around how you interpret the phrase "fully functional again, just as if you’d never been reduced to 0 or fewer hit points." Now, what exactly does that mean?
While everyone has focused on the other sentence, this phrase has remained largely untouched. I've quoted dvvega below because his comments help me get to my point.
No where in the definition of Disabled do you see any mention of the condition being removed after healing, retroactively or otherwise.
The extra sentence (after whitespace) that the "side of retroactive disable removal" keep trying to refer to is not part of the disabled definition. It is only found in the combat section of the SRD because it refers to continuing to act and battle not to the disabled condition itself.
True enough. A brief perusal of other conditions reveals that about half of them include info on how the condition is removed, half do not, so I wouldn't argue that the definition of the condition is necessarily exhaustive. The combat section gives the most pertinent information to how this situation works in combat, and I'd argue that the extra information logically belongs there rather than in the glossary-like definition of conditions.
This is a seperate statement and indicates that if you can get yourself above 0 hit points after the action then you are fully functional. It is an indication that the Disabled condition is no longer in effect if you can get to positive hit points. It does not say in any way that the condition is retroactively removed.
But it does state that it is retroactively removed. It states that if you receive healing, you are "fully functional, as if you’d never been reduced to 0 or fewer hit points."
And if the status change is immediate, then "after the action" is not pertinent. If healing removes the disabled status and makes it as if the disabled status never affected you, then why would the lingering effect of the disabled condition -- taking a point of damage for taking strenuous activity" persist? You're disabled, you take an action, you get a point of healing, boom! you're not disabled and it's as if you never were, therefore no damage from the action.
Why else would that phrase be added? What else could it possibly mean? Is it merely stating the obvious? Because if you receive healing and get your hp above 0, then obviously you're not disabled anymore, which is a condition that results from having 0 hp. I argue that if it is included in the SRD, then it means something pertinent and serves a reason more than just stating the obvious.
But what does it mean? What does "fully functional" entail? What is the meaning of "just as if you had never been reduced to 0 or fewer hit points"? If I was dead and something made me fully functional, as if I had never died, I wouldn't be dead and I also wouldn't be decomposing because I was dead. Of course, I wouldn't instantly get back the time I lost while dead, but I'd be alive and whole again.
Removing the disabled status doesn't give you back lost actions. It doesn't say you were never disabled. It says it's as if you were never disabled. No lingering effects. No damage from strenuous activity.
