It seems to me that this is the case, that the only terrain combat reductions that are removed are the ones from the target hex, but is that true?
For example, if an infantry unit on a river hex is ordered and battling melee into a town hex and Sappers is played, would that infantry unit still have a combat reduction of 1d from battling out of the river hex, or would there be no penalties at all?
Text on the Sappers card: An ordered Infantry unit, when targeting an enemy on any non-clear terrain, will ignore all terrain combat reductions in melee.
A fast view to the FAQ for Sappers is what lead to the post
While the question posed there doesn't directly address what I posted above, I do believe that it implies only the target hex's combat reductions are ignored. But, I like having solid examples to be sure.
The text on the Sappers card is unambiguous: "all terrain combat reductions are ignored", but from the FAQ, it seems what is meant is "all terrain combat reductions due to the targeted hex are ignored". What the question on the FAQ was directly asking is whether or not Sappers would allow a unit that enters a forest hex to now battle, where without the play it would not be able to do so. Nothing on the card suggests that is possible (unless one equates "reductions" with "restrictions", which I've certainly been known to do ), but good to talk about it to be certain.
The FAQ in question:
Q: Does the Sappers benefit from battle out- and inside? Are units allowed to battle if they move onto a terrain, which prevent normal battles?
A: Only when the enemy unit or leader is on terrain will the Sappers card work. (Only into - target hex)
Playing the Sapper card will not allow an infantry unit to enter a forest or town and still battle.
(Richard Borg: 2015 - June - 22)
Not an answer here, but merely an expression of thoughts and opinions.
Personally I find the card very gimmicky. What sappers could really do to a whole forest hex in the context of a battle-timeline seems extreme if compared to reality. I know in this game reality is abstract, but nonetheless, this one seems more so to me.
FWIW (very little as you want the official answer), I have found this game's rules are nearly always "Play what you see" in the rules as written. For me, that card will have me playing it as "ignoring terrain reductions" and that means Combat Modifiers and also only using the 'targeted' hex. For me, I will be interpreting it to mean that the hex i'm attacking from will still keep its effects as that is not what is being targeted. So if I had just moved into a forest, they won't be able to attack. As I say, personal opinion rather than substance, but forums are for chatting.
That all said, I'm open to correction from the designer or Game Co.