Uncertain if this is a problem with [[!Contagion Engine]] on all creatures, or if something weird is going on in the background with it and [[!Vengeful Townfolk]] or [[!Nurturing Pixie]] in particular
#-1/-1 counters from Contagion Engine stay on creature blinked with Nurturing Pixie to hand
raven mauve
turbid ledge
raven mauve
In a subsequent match, opponent used the Engine to -1/-1 a Townsfolk and a [[!Roxanne, Starfall Savant]] before proliferating.
For some reason, the counters on Roxanne proliferated, but the counters on the Townsfolk didn't. At the same time, the Townsfolk was enchanged by a [[!Stop Cold]].
Maybe the AI chose not to proliferate the counters on Townsfolk because it would then lose A card of it's own, even if it's just a creature removal enchant?
broken bone
While I can't argue with a screenshot, I did try and fail to reproduce this on 1.6.62-SNAPSHOT-04-18 with Dev Mode assistance, either in the case I'm the one casting Contagion Engine and targeting myself, or when it's the AI doing so: Vengeful Townsfolk drops the -1/-1 counters as expected when returned to hand via Nurturing Faerie.