Yes, challenges that specifically exclude certain languages or penalize them should be considered off-topic and closed as such
The spirit of this site is to write the shortest code per language for a challenge, not just the overall shortest code. We do not forbid users from posting answers which have worse scores than existing answers; in fact, we encourage it, for the purpose of getting solutions in every language.
Challenges such as the one linked are not in accordance with this spirit - they attempt to exclude languages based on a preconceived notion that some languages are universally better than others for golfing, a notion that is easy to prove false just by looking through the challenges on this site. Prejudiced questions like that one have no place on this site, and should be closed as off-topic.
Note that this does not include the implicit exclusion of languages, such as by requiring functionality that a language might not have (graphical processing, for example), or by disallowing features that the language would otherwise need to answer the challenge (such as certain builtins that trivialize the challenge). In fact, the latter would be a preferable course of action when there is a legitimate reason why using a certain language would confer an unfair advantage; not only does it accomplish the same thing by removing the unfair advantage, it also allows the language to still be used if it can solve the challenge without the unfair advantage, and it also will cover any other languages with similar unfair advantages that might be missed by excluding a specific language or set of languages.
This also does not include specific-language challenges, where answers are required to be in a certain language (or one of a certain set of languages, such as the TIOBE Top 20) - those have been decided to be on-topic in the past (see the linked meta post in the question), barring any other major issues in the challenge.