Since there is no way to determine if a geocache is a challenge or not, we are searching for Unknowns with the word Challenge in them. As that is the definition by current (soon to be outdated) guidelines.
In this particular case the cache is named Challenge, but is not a challenge. It has therefore been tagged by someone on a script called "Not really a challenge" which always returns that it's ok to log it.
This is a workaround by the community until we have a better way to filter out non challenges. It is likely that we will implement something smarter the coming weeks. For example, let the community vote away challenges from being challenges and create exceptions.