You know, when a mob casts on us as players we are temporarily stunned for all intents and purposes. I think this is why malicious players used to be able to interrupt crafters by casting, too. If the same mechanic applied to friendly casts, "blinking" players wouldn't be able to blink out of your cure.

Other possibility, once the casting command has hit the server it is "in queue", meaning regardless of what the paper doll does the spell will proc, barring caster interrupt, which will also go "in queue." And there is a queue; if you get hit via DoT to take you to 0 but should also regen at that same time, the kill shot goes through first, the regen after, not a straight take DoT for -7, regen for +10=3 point regen/tick, so if your HP is 6 at the time it ticks, you die.