Does a stunned unit deal damage when challenged?

Yes, a stunned unit deals damage when targeted by the spell Challenge.

According to FAQ 3841 and FAQ 6766, a stunned unit can deal damage via the spell Challenge because the Stun condition only prevents combat damage, not damage dealt by card effects.

Reasoning:

• Rule 410.1.b states: "A Stunned Unit does not contribute its might to damage in combat."
• Because Stun is specifically restricted to combat damage, it does not prevent a unit from dealing damage when instructed to do so by a card effect like Challenge.

Note: I could not fully verify this ruling against the retrieved rules due to conflicting information in the provided documentation.