It seems a toxic plague is being spread around Azeroth and beyond, typically at hearth zone-in locations, however, it’s also been found in inns and flight-path start/end points. For a normal high-level character, it will tick off, however, for low level (and thus most Challengers due to our low health) it’s pretty much insta-death.

The spell in question is Toxin. From digging around the in the comments it seems this is a debuff from an AQ40 boss: Viscidus.

Blizzard is aware of the issue and would like any new instances of the issue reported to these forums: https://us.battle.net/forums/en/wow/topic/20754415980. If you have any information on the subject please post to the Blizzard forums.

At this point, it may not be safe to log out in inns or common areas frequented by large groups of people. Slower rest XP is better than a possible death and re-rolling your challenger.

This was reported to us in our Discord server by Flutterby, thank you!