It might have been misjudged in this instance however, but they're a thing in military circles so I can imagine how it seemed like a good idea.
Tbh I'd have been really pleased, but I can appreciate that's not universal.
I've never seen a civilian use one. We don't spend much time in bars, and the feeling I get is that if I did try to whip one out in the presence of uniformed personnel -- a challenge that I would almost certainly win, given who this coin was from -- that would be a tremendous faux pas.
So at best, this is the sort of object that carries some real meaning in a very particular social context among a very particular set of people, but that meaning doesn't carry over to anywhere else. Like baseball or Pokemon cards, I suppose. How would you feel about your boss switching out Christmas bonuses for packs of World of Warcraft cards?
Which "axes" are in play, and who "wins" (or ties, a lot of the rule variations I've heard are set up to optimize towards ties; the most common challenge is just whether or not the other person has a challenge coin of any sort, not necessarily trying to figure out which wins if both people have coins on them) varies a lot between groups.
Also, challenge coins have seeped into some parts of lay culture, especially bar culture (given that alcohol has always been the big bet, it shouldn't be a surprise). For instance, the liqueur Fernet has its own challenge coins that bartenders tend to challenge each other for free shots of Fernet. (Bars try to keep one in reach of the bar at all times in case the bar is challenged, and the number of people that have them that have them that aren't themselves bartenders is supposedly kept quite rare.) https://talesofthecocktail.com/history/part-family-behind-sc...
Incidentally, Howard Tayler's Unofficial Anecdotal History of Challenge Coins is excellent.
https://www.schlockmercenary.com/assets/img/uploads/UAHCC/UA...
One guy I know has enough of these things you’d think he was a navy seal, mostly from training sessions. His actual job is monk-like copying/summarizing of NIST documents and CVEs.