After a Pinch of Powder comes out of Shadows, attach it to a character. Limited Response: After you win an or challenge by 3 or more STR, return the attached character to its owner's hand. Then, you may kneel 3 influence to return A Pinch of Powder to Shadows. (Limit 1 limited response per round) There is a unique character with a duplicate that has pinch of powder on him. The opponent wins a challenge to trigger the response, and return him to the owners hand. As I understand the duplicate rule, a duplicate can be discarded to save the character from returning to hand. If the duplicate is not discarded (choosing not to save) are both characters returned to hand? If not, what happens to the duplicate(s)?

If the character isn't saved with the duplicate, then the duplicate is discarded when the character is returned to it's owner's hand.