I don't think it's clear from the rules as written that "The challenge lasts until the end of the turn" is intended to override the more universal (and taken for granted) rule that if a model dies, you are no longer in base-to-base with it (it's removed from the table). If this override WAS supposed to happen, it would be explicitly stated that wounds are still allocated to the dead model even though it has been removed.
I don't think that what actually happens is clearly described in the rulebook. For clear RAW we'll need to wait for a FAQ.
RAW completely overrides a universal/taken for granted rule, because in a permissive ruleset, it *explicitly* states what happens in a given scenario. IE Codex overrides Rulebook, FAQ/Errata overrides Codex and so on. Below, I will outline;
Then by this logic, you throw a Bloodthirster at my unit of 10 Marines. You challenge, I accept. You kill my Sarge with a Fist and say 5 guys. I have just lost my Fist, and 5 guys. Same scenario. You challenge, I refuse. Sarge goes to the back, you kill 6 guys. I break, run, you don't catch me, I auto-regroup and still have my power fist. What happens if I have a sergeant, my Librarian, and 4 marines? The whole point of challenging is that you throw one model so that the rest of the unit is unaffected; otherwise by your logic, I challenge and the the Thirster wipes out my entire unit, including the HQ I was trying to protect.
Why would I ever accept a challenge with anyone knowing that no matter what, my squad is going to take wounds? It completely invalidates the whole idea of challenging, then.
Now, let's here's my reasoning;
a) The rules under "Fighting in a Challenge" are very specific in what happens once you accept a challenge in regards to positioning. You have to get into Base to Base (disregarding any difficult or dangerous terrain) with each other, even if 1) it means swapping a rank and file guy for the challenger, 2) swapping a rank and file guy for the challengee, 3) baring that, assuming that the two are in base to base for the purposes of the ensuing fight.
b) For the duration (one round, two rounds, the entire game) of the challenge, these two models are considered to be in base to base contact *only* with each other. - This is direct from the book. Note the use of the word "are" and "only". These words specifically dictate the positioning of the challengers relative to the rest of the unit.
c) When one combatant in a challenge is slain, regardless of which Initiative step it is, the challenge is still considered to be ongoing until the end of a phase.
EXAMPLE: A techmarine has both a power weapon (I4), and then at Initiative 1 gets his Servo-Arm attack, Sam has previously stated that the techmarine normally would get a pile in move at I4 (his base), and then again at I1. I challenge your sergeant and at I4, I kill him. So, now, (by your logic), since he is no longer there, I can then make a Pile-In move at I1 and Servo-Attack your unit.
Except I can't, because I am "considered" to be in base contact until the end of the Phase, and I cannot make a pile-in move, since I am "considered" to be in base contact already.
So I think that this is pretty specific in regards to positioning of a model within a challenge. If you accept a challenge, you are in base contact *no matter where you are in the unit*. For the duration of the combat (IE multiple rounds), you are in base *only* with each other. And if you kill one, you are *still* in the challenge for the rest of the phase, which then means the duration is extended to the end of the phase, and you are *still* only in base with each other. The dead model may be removed from table, but
you are still considered to be in the challenge, and all the positioning rules apply. 0 wounds, taken off table, removed from game, removed as casualty, thrown against the wall, put into a food processor, whatever you want to call it; as RAW, I am still considered to be in base contact for the duration of the challenge with a combatant in a challenge and no matter how much I want to overflow wounds, by virtue of allocation, by virtue of the pile-in rule I can do neither, so I sit on my ass and wait.
This is RAW.
Now, let's look at the units themselves;
a) I will cede that RAW, it doesn't not *explicitly* say that wounds do not overflow. But, it also does not *explicitly* say they do. Permissive Ruleset then applies.
b) wounds from other models cannot be allocated against the challengers - resolve the wound allocation step "as if the two characters were not there".
c) You
cannot allocate wounds with Look Out Sir.
d) The Moral Support rule - by your logic, if wounds overflow, then legally, it's not a challenge because "
the bystanders can be affected", which negates the "assume that such bystanders are cheering their leader on" and "...your character receives on re-roll for every five models forced to watch in this manner"
This then, with the bystanders not being allowed to be affected per the Moral Support rule, the "assume the two characters were not there for the Unit's wound allocation step" and the inability to take a Look Out Sir test leads to the fact that
It is a complete and separate combat from the challenge for the purposes of positioningMove on to Assault results; "Unsaved wounds caused by a challenge count towards the assault result, alongside any unsaved wounds caused by the rest of the characters units" - That's a clear differentiation.
It just doesn't happen. You cannot overflow models from a challenge, based upon the rules for positioning within a challenge, the rules for what happens if a model is slain, the rules for Moral Support, and the rules for Pile-In. By the logic presented above, you would be breaking 4 already established rules in order to overflow wounds, and that cannot happen.
