Nope, shouldn't effect anything. I don't think losing to the guard or taking his offer counts as an official "defeat" like the others.
Viewing post in Cruel Serenade 0.3.3 is up! comments
If by “fairly difficult” you mean “literally impossible unless somehow all of your random target attacks hit single targets every time, and they still miss more often than usual”. I have tried to ‘wait it out’, but once the debuff is applied their damage in between trigger phrases is more than healing can keep up with. Also even if that is the intended strategy I feel like it goes against the spirit of rejecting the offer in the first place.