Nevermind, I found the answer in the reference doc so I'm "effectively" deleting my last post. And Hero Lab is doing it right when applying ability damage. (Thought it wasn't working when I used the Ability Damage option under Other Adjustments.) And now I feel more like an ID10T after playing this these adjustments for a few minutes. Hero Lab is applying the Ability Damage and Ability Drain correctly, not making feats RED when Ability Damage is applied. There is nothing to see there, move along. 

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