The challenge isn't necessarily a display of how many troops you have, nor is it about building a giant MOC displaying all of them. It is simply a creation showing you character getting ready for the purging of the Magic Islands. If it is just your character putting on his armour in a small vignette, it counts as well. Granted, it probably will not get you to first prize, but it's a start. If you build just a small creation which shows all of the troops you currently have it will do just fine, as long as you put in some nice details.
At least that is what I'm doing, since most of my collection is in a colab-build that need to stay intact for a while. I should add that I'm not a FO, so maybe my take on this challenge is not completely right, but considering the past challenges I think I'm on the right track