Sludge Monster — ruling 1

If a non-Horror creature with a slime counter on it somehow becomes a Horror, the effect making it 2/2 and making it lose its abilities ends. Its base power and toughness will revert to whatever it was before that effect started applying, although other effects that modify power and/or toughness, such as ones created by Auras, counters, and the like may still apply. It'll also have whatever abilities it had before it lost them.

Sludge Monster — ruling 2

Sludge Monster's last ability affects all non-Horror creatures with slime counters on them, not just creatures that had slime counters put on them with Sludge Monster's first ability.

Sludge Monster : règles, fonctionnement et interactions (MTG)

Sludge Monster is one of those cards players keep asking about. Here is, in plain words, what its official text says, the rulings published by Wizards of the Coast, and the combos players actually run.

Official card text

Whenever this creature enters or attacks, put a slime counter on up to one other target creature. Non-Horror creatures with slime counters on them lose all abilities and have base power and toughness 2/2.

How it works : Sludge Monster

Original English text — Wizards of the Coast / Scryfall

#1September 24, 2021· Wizards of the Coast
If a non-Horror creature with a slime counter on it somehow becomes a Horror, the effect making it 2/2 and making it lose its abilities ends. Its base power and toughness will revert to whatever it was before that effect started applying, although other effects that modify power and/or toughness, such as ones created by Auras, counters, and the like may still apply. It'll also have whatever abilities it had before it lost them.
No other card is named in this ruling.
#2September 24, 2021· Wizards of the Coast
Sludge Monster's last ability affects all non-Horror creatures with slime counters on them, not just creatures that had slime counters put on them with Sludge Monster's first ability.
No other card is named in this ruling.