He can't be Reborned, revived with REDMD, etc. "Cannot be Special Summoned" means just that, man.
As for the first question, when his stats are too low, his effect will activate, but since he can't have the ATK/DEF decrease during resolution, he won't negate. And actually, his final negate brings him down to 800 ATK, since at that point he has 400 DEF, 100 below the required decrease.