He is using the most detailed damage tracking sub-system - where each attribute gets half the attribute (rounded up) in wound boxes. Each net success taken, you check off one box, and when all the boxes of a given attribute are checked, you lower the attribute by one and erase all the checks. The conceptual thing was that the boxes are superficial damage that the body will eventually heal. After a few nights of good sleep, you should be fine again. The attribute numbers, though, are real damage what rest and relaxation do not fix. To heal these numbers, the character needs medical attention or some higher healing power.
Regeneration by itself only acts as an accelerated rest. It clears boxes faster. There would be a separate power to heal numerical Attribute damage. Toughness - which previously increased the multiplier on your Constitution, now becomes a different multiplier on boxes - Daredevil has a really high Toughness, for instance. Armor can be represented in different ways - you can have armor with a high Penetration value to prevent damage, and you can have armor with a bunch of wound boxes to absorb damage, for example.
So far all interesting stuff!