Does a custom stage count as a handicap when earning challenges?

I just started working on challenges in Smash Brothers Ultimate. I checked the one where you need to beat a level 5 CPU while having 300 damage. I'm not that good, so I built a level that surrounds the spawn points with cannons. If you move, you die. I picked Snake and spammed rockets, easy win. This does not seem to work with the challenges where handicap needs to be off. I think I have everything off, including the damage handicap. The last thing I can think of is that using stage builder levels counts as a handicap, but I can't really find anything that says so on the internet.