It specifically says that characters cannot refuse challenges. That doesn't prohibit a champion from accepting a challenge in their stead. It also doesn't prohibit a champion from issuing a challenge instead of the character-- it says that "any model able to do so" must issue a challenge. Since you can only have one challenge per combat, there's nothing stopping you from sending a unit champion to go fight something ridiculous that your Hero or Lord can't handle (and to be fair, there's not a lot out there that fits that description, but sometimes you also want your Lord to sweep ranks and deal with the character later).
On a similar vein, it says that characters cannot refuse challenges, but a unit champion is not a character, but rather simply a model that can fight in challenges. If you have a unit champion in the unit, I don't see why the unit champion can't refuse a challenge.