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Challenge-Based Learning (CBL) is an educational approach building on Problem and Project based Learning. It gained popularity over the past decade, providing engineering students with authentic learning environments. The study examines the project development process in a first-year interdisciplinary course on ethics and data analytics, identifying seven distinct phases with specific focus areas and challenges. The study develops a thematic trajectory analysis using participant observation of six groups, totalling 22 students. The study offers recommendations to support students in developing CBL projects, providing valuable insights for educators implementing CBL or similar real-life projects.