If an amount of damage would be dealt to Magma Pummeler greater than the number of +1/+1 counters on it, all of that damage is prevented, and all of those counters are removed. In most cases, this will result in Magma Pummeler having 0 toughness, so it will be put into its owner's graveyard. Its reflexive triggered ability still triggers and it will still deal that much damage to any target.