[RPG] Constitution bonus and health

In addition, multiply your total Hit Dice by the Ability Damage penalty and subtract that amount from your current and total hit points."

For every 2 points of damage you take to a single ability, apply a –1 penalty to skills and statistics listed with the relevant ability.

-d20pfsrd

Hp lost: 5 x -3 = -15. After another 7 ( 14 total ) the HP lost would be 5 x -7 = -35. With a Con of 2, and 0hp, he is conscious ( barely ), but not dead, because of: "When a creature's hit points drop below 0, it becomes unconscious. When a creature's hit points reach a negative total equal to its Constitution score, it dies."d20pfsrd

A further 1 point of damage will not do anything. An additional 1 point of damage after that will kill the character: "A character with a Constitution score of 0 is dead."d20pfsrd

Your player is correct; the rule says your HP stays the same so your HP stays the same. The game very rarely (and only very awkwardly) cares why a particular statistic has the value it does; it just cares what the value is. In other words, when it says the hit points of your original form, it just means before using Wild Shape, including the item (and spell effects and so on).

Note that this does not invalidate the rule that the item is melded into the character and deactivated. That still happens. The character does not have a magical enhancement bonus to Constitution while Wild Shaped, and his Constitution (for the purposes of Fortitude saves, Concentration checks, and so on) is what it would normally be for that animal.

It is despite those facts that the HP remains what it was before the Wild Shape, including the HP due to the higher Constitution that the amulet of health granted. When you Wild Shape, your Constitution changes: your new form has a different Constitution, and the amulet of health is deactivated. Nevertheless, your HP is not affected by these changes in Constitution.

If it matters to you, though, just houserule it and maybe give the player the opportunity to swap the Amulet of Health with something else if they like. You’re right that it seems odd to “benefit” from a deactivated item. And the druid is plenty powerful enough without that option.