Good question. When a card is successfully challenged, it is not removed from the Event. Instead, it is treated as the worst possible result for its owner.
The Event is still resolved normally so there is always a winner. If both Knights successfully challenge each other at the same Event, both cards are treated as their worst result and the standard tie-breaker rules apply. The game is designed so Events never end in a tie.
I'm going to change the wording to something like,
After revealing the cards, each correctly challenged card counts as worse than any normal value for that Event.
If both Knights successfully challenge each other at the same Event, resolve that Event using the standard tie breaker.
Does that make it clear as intended?