At first you experience delight over the weight loss and feel proud in your ability to eliminate certain food or food groups.
The instant gratification of losing weight is short lived as the diet becomes too strict to stick to. Add in the usual demand of increased exercise that many "Challenges" requires that you do, placing further demands on an already depleted calorie intake and before long you revert back to old habits which are now entwined with all sorts of feelings like failure, guilt and an overwhelming feeling of disappointment in yourself.
Weight gain after going on a diet is due to:
The diet being too low on calories to maintain for any length of time
Eliminating or restricting certain foods that does not fit in your lifestyle or manageable long term.
Excessive exercise that is not able to be maintained long term.
Dieting of any type can change the muscle to fat ratio, however the more a dieter engages yo-yo dieting (weight off/weight on) the more efficient the body becomes at storing body fat (thereby increasing the fat ratio at the end of each cycle).
So, if you start a challenge, be prepared to make it a lifestyle change for it to be successful long term.