Kevin,
Thanks for bringing this up - We appreciate constructive feedback like this. I'd like to take a moment to answer your questions to the best of my ability, after discussion with my peers.
1. Does negating a band ability negate the abilities of the characters that were banded in?
Short Answer: Yes
Long Answer: "Cascade Negates" do exist as a concept in the game, and banding is not an exception to them - See Question 4 for more.
2. Does this affect anything else besides drawing, searching, and banding?
Short Answer: Yes
Long Answer: Theoretically all abilities are 'Cascade-able', the most prominent being 'Use other Enhancement' abilities - If I play Coat of Many Colors, and then a bunch of off-brigade enhancements, negating Coat also negates those enhancements - This is why most 'Use other Enhancement' abilities printed recently have Cannot be interrupted language on them
3. If the answer to 1 is yes, why in the world does this rule exist when just having the rule not exist would make the game more intuitive and less complicated?
Long Answer: As an Elder team we feel that the complexities that occur in these rare situations (Namely mass-bands) are a far smaller negative than the huge power-bump these abilities (Namely draw) would get if we removed the concept of 'cascades' (Also worth noting, we've been talking for a while about making 'Use other Enhancements' CBI as a default to remove that particular ability from realm of cascades)
4. If the answer to 1 is yes, why is not even a tiny side note in even one entry on the entire REG and/or rulebook?
Short Answer: There is
Long Answer:
General Description
A negate ability takes a previously completed ability and undoes the effect of that ability, and it keeps the uncompleted activation of an ability from ever completing.
It is our understanding that the phrase 'Undoes the effect of that ability' is the 'Cascades' idea you've referenced. Part of the 'effect' of a band ability is the activation of the banded characters ability, Therefore negating a band ability also negates the banded character. Part of the 'effect' of a search ability is that I have access to that card, if I negate the search, I never had access to the card to activate it, so it gets negated.
We understand that there are complexities that exist within the game, and strive to make things clear whenever possible. We'd like to include language in REG 5.0 that clarifies the idea of cascading negates as noted above - We believe it could be as simple as this:
General Description
A negate ability takes a previously completed ability and undoes the effect of that ability, and any ability activated because of the negated ability. A negate ability keeps the uncompleted activation of an ability from ever completing