You forgot to put the classnames of the entities when registering FM_Touch...
PHP Code:
register_forward(FM_Touch, "forward_touch");
->>
register_forward(FM_Touch, "entity_head", "player", "forward_touch");
Since you register touch only between the desired entity and the player, and make an exception if the toucher is the owner of the entity, there won't be any problems...
Also, you forgot that in touch, the indexes you will have are the index of the head entity and the index of the player touching it...
You need to retrieve the index of the owner of the entity, and kill him ( preferably using execute ham kill ) after which you need to remove the entity
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