Stone Forged works just like Doc's No I'm Fine ability:
No, Iʼm Fine - When another friendly Privateer model makes a Tough roll of 4, 5, or 6 while in this modelʼs command range, that model heals 1 damage point and is knocked down.
Stone-Forged - Once per game while in formation, this model can use this ability during its unitʼs activation. When a model in this unit that is in formation is disabled, it heals 1 damage point and is knocked down on a Tough roll of 4, 5, or 6. Stone Forged lasts for one round.
The wording on Stone Forge may need to be tweeked alittle to say something like "When a model in this unit that is in formation is disabled and when it makes a tough roll, on a 4, 5, or 6, it heals 1 damage point and is knockdown."
And yes Steady will allow the model to not be knockdown if it make's it's Tough Roll.