Does a continuous effect that sets power and toughness override +1/+1 counters on a creature?

Magic resolves continuous effects in a strict layering system. Power and toughness modifications all happen in Layer 7, but that layer is subdivided: 7a (characteristic-defining abilities), 7b (effects that set P/T to a specific value), 7c (effects that modify P/T without setting), and 7d (counters). Effects are applied in that order, so +1/+1 counters in 7d are always added after any P/T-setting effect in 7b.

This means an effect like Humility (which sets all creatures to 1/1) or Godhead of Awe does not erase or suppress counters — it just establishes a base before counters are counted. The counter's bonus is then added on top in 7d, yielding a final P/T higher than the set value.

For example: your 0/0 Hangarback Walker has three +1/+1 counters on it, making it 3/3. Your opponent casts Diminish, setting its power and toughness to 1/1 until end of turn (a Layer 7b effect). The three counters are still applied in Layer 7d afterward, so Hangarback Walker ends up as a 4/4 for the rest of the turn, not a 1/1.

The only way a P/T-setting effect could override counters is if it also removed or exiled the counters themselves, or if a rule specifically prevented the counters from applying — neither of which is the normal case.

Relevant rules: CR 613.3 (layer ordering), CR 613.4c (Layer 7 subdivisions a–e), CR 122.2 (counters affect P/T in layer 7d).