Yeah, I think this should be looked at.
The transformation is a replacement effect of dying. This would depend on a few factors, many of which are not looked at properly in IW.
In magic, it depends on priority and whose turn it is. Since we do t have turns, initative should be a deciding factor on resolutions.
In the worst case scenario, both replacement effects should happen, leaving a 8/4 undead character removed from game.
In other words, the rules of the game reallllllly needs a good looking at before gold launch.