Actually, you can keep younger children around when there are teens but no parents on the Sims 2. There's even a premade family that consists of two teens, two children, two toddlers and no adults. You do have to be careful about the teen/s leaving the lot, though, because if all the teens leave and there's no nanny around, that can prompt the social worker to come. There is at least one mod that does away with the social worker, though.

Instead of a child and a baby, you could try to have the Big Sister take care of a child and a toddler, but this will make the challenge possibly too hard. Especially if you forget to take care of their needs because of being busy fishing, gardening or collecting.

Personally, I don't see why the same rules wouldn't apply. The only difference is the Gender. In fact, I would have named this the Big Sister/Big Brother Challenge if I had thought of it first lol

I suggest removing the 'Don't talk to young adult (adult, elder) sims' rule though. That rule makes sense in the Sims 3, but not in the Sims 4.

I don't know if the creator of this challenge is still around or not, but I'll ask the people doing the challenge also. Are there any restrictions on lot traits? Also has anyone found any mod that allows teens to be caregivers with Parenthood?

You don't need a mod. Just have the child make the teen a caregiver, or have the teen make the child their dependant. I did my own teen-toddler-big-brother challenge with the new parenthood pack and you can become caregiver.

I don't have the options to adopt as caregiver/dependent from either of them. And the only parenting option is to put to bed.

I think I'll use this challenge for my Youtube channel. Thank you for posting.

This sounds like fun, but I will make some revisions to the rules. I won't do the big happy family because I think you need to be an adult in order to complete it, and my sims will live in san myshuno. It sounds like lots of fun though.

now that there’s the baby stage after the newborn stage... can you do the challenge with a teenager and a baby? or does it have to be an infant? I would love to make that little modification

This has now been added to the full list of Sims 4 challenges located here: https://www.thesimschallenges.com/