No, that's not what that means.

If Living Hair’s Combat Values aren’t considered replacement values, how would they actually get the modifiers?

The way I'm understanding is the Hair values are treated as printed, but you refer to Medusa to know what they are. So modifiers would work just like on any other character. Look at Medusa to see the Hair's "printed" values, then modify accordingly for powers and such.

The same way any other combat value gets modifiers. The Hairs printed values are whatever is showing on Medusa's current click, so that's the number you start with. Then you calculate the value from there, as usual. Replace, then modify.