Does Unyielding Spirit prevent the damage from Challenge?

Ruling: Unyielding Spirit does not prevent damage from Challenge. Challenge does not deal spell or ability damage; the units themselves deal the damage to each other, so it bypasses effects that refer to spell or ability damage.

Nuances:

• The rule stating that spells, abilities, or other game effects deal damage and units mark that damage does not mean all damage is spell/ability damage - it only describes how damage is tracked
• Unyielding Spirit specifically cares about the damage type (spell/ability damage), not just any damage marked on units