So the new NW faction plot card states:

" You cannot lose (and your opponent cannot win) the first challenge initiated against you each phase.

This is obviously huge for the defensive minded crows. That being said, I'm confused as to how this works. Do the loss conditions simply not take effect, or is it that it doesn't count as a loss?

For example, say an opponent declares a military challenge against me. For the Watch is in play. He cannot win and I cannot lose. Thus I do not have to sacrifice a character even if he throws Gregor at me. Additionally, my opponent could not play any cards or activate any abilities contingent upon victory such Put to the Sword. However, if I fail to select a defender, would he still get a power token for an unopposed challenge?

The bonus power for winning an unopposed challenge is contingent on actually winning the challenge, so your opponent gets no power for the first challenge each phase you decline to defend while you have For The Watch! as the active plot.

Basically the first challenge becomes a cost to pay to be able to try other challenges.

Thanks!

Keep in mind that while the vast majority of reactions are "after you win/lose a challenge," reactions that said things like, "after a challenge is resolved" or "when the winner of a challenge would be determined" could still be used.

And do keep in mind that it doesn't mention "you cannot win", just that your "opponent cannot win". So you could trigger beneficial effects for yourself on that trigger if desired.

You still need to win the challenge by having more STR than the attacker, this plot doesn't give you a free win.

You still need to win the challenge by having more STR than the attacker, this plot doesn't give you a free win.

Of course, but good to clarify.

Does this mean that if this plot is out then and NW defends with no one then the result is that the challenge just fizzles with no resolution sorta like when there is 0 attacking str and 0 defending str?

Yes, but with cards like The Shadow Tower and Sword In The Darkness available to them to punish weak probing challenges just to get For The Watch out of the way., it may not be in their interest to not defend.

Does this mean that if this plot is out then and NW defends with no one then the result is that the challenge just fizzles with no resolution sorta like when there is 0 attacking str and 0 defending str?

This scenario is indeed like the one with 0 STR on each side, in that there is no winner or loser. However, this happens during resolution (since this is when you compare attacking and defending STR). Currently, the only way for a challenge to end without resolution is In the Name of Your King! (which stops a challenge immediately).