The OED entry is good:
"2 With prefixed adverb or modifying noun.
a.euphemistic (originally U.S.). Of a person: having a disability of a specified type; esp. in physically challenged.
Originally intended to give a more positive tone than terms such as disabled or handicapped. The use was rapidly undermined, however, by terms whose intention was to make fun of the attempts at euphemism and whose tone was usually ironic."
There are examples of the unironic use from 1977, 1990, 1995, 1999 and 2016.
Leo currently has:
challenged person - der/die Behinderte
severely challenged person - der/die Schwerbehinderte
vertically challenged [hum.] - kleinwüchsig / klein - Person
Even when the English "challenged" was considered PC, you would have talked about "mentally/physically challenged person", not just "challenged person". So this entry has never been accurate.
The German side is dated, isn't it? You'd add "...Mensch" these days?
So perhaps you could have something like this for the dated PC use:
mentally/intellectually/physically challenged person [dated] - der/die geistig/körperlich Behinderte [dated?]
The current entry for the ironic use is a bit rubbish, isn't it?
vertically challenged [hum.] - kleinwüchsig / klein - Person
More evidence of the dated English PC terms:
These guidelines have been prepared by the United Nations Office at Geneva as part of efforts to implement the
United Nations Disability Inclusion Strategy, launched in 2019.
Please note that terms in the same cell should not be considered as synonyms. They are grouped together by
category.
Language to be avoided [...] intellectually challenged
Recommended language [...] person with an intellectual disability/person with an intellectual impairment
https://www.ungeneva.org/sites/default/files/...
APA Inclusive Language Guidelines
Term to avoid [...] physically challenged / mentally challenged
Suggested alternative [...] people with intellectual disabilities / physically disabled person / person with a physical disability
https://www.apa.org/about/apa/equity-diversit...