In that case: which one of the 12000 challenging nodes gets the block reward?
The first one accepted by the full nodes (just like normally a block is "the first" to be found and accepted). I'm however aware that this isn't easy to define, and would need a specific mechanism if there is ambiguity about who is the first in the network, and it's possible that this mechanism can be influenced by miners.
If we're going to have large protocol changes anyway, wouldn't it make more sense to make transactions private by defualt (like Monero)? You can't censor what you can't see.
I had definitely thought about Monero as well. But I thought that there could be still a censorship problem there, as I supposed miners still see all the origins (i.e. the UTXOs where all inputs of the block originate) of the transactions, only that they apply a mandatory CoinJoin to it.
Maybe I'm wrong and they can't see that, I unfortunately don't know the Monero protocol that well. If I'm wrong and miners can't censor anybody in the Monero protocol, then at least we can say that the problem is
theoretically solvable and that would be awesome

Then of course the question would be: could such a mechanism also be added to Bitcoin eventually in a way censorship is prevented? Or perhaps other mechanisms, coming e.g. from Zcash, Grin/Mimblewimble etc.?