You’ve Defected, and they’ve Cooperated, the moment you issued your challenge, and they didn’t. They’re now in a disadvantageous position, and you’re in an advantageous position; their subsequent Defection is in a different game with altered payoffs, but it also qualifies as a PD. (You could, after all, Cooperate in the subsequent game, and retract your challenge.)
Prisoner’s Dilemma is generally iterative in real life.
You’ve Defected, and they’ve Cooperated, the moment you issued your challenge, and they didn’t. They’re now in a disadvantageous position, and you’re in an advantageous position; their subsequent Defection is in a different game with altered payoffs, but it also qualifies as a PD. (You could, after all, Cooperate in the subsequent game, and retract your challenge.)
Prisoner’s Dilemma is generally iterative in real life.