How does the CHC Algorithm deal with child populations with lower fitness?
CHC never has a next generation's population with lower fitness than the current one due to the use of a truncation selection step. It combines the parents and offspring, sorts by fitness, and takes the best $n$ individuals. So if including any child would lower the fitness of the population, it would just select the parents as the next generation and the average fitness would stay the same.

In principle, you could indefinitely select the same two parents over and over, continually producing inferior offspring. But generally you're running CHC with a population size of 50 or more, so you don't expect to continually pair the same two parents. Also, it's technically an infinite loop anyway, as most GAs are. In practice you define some stopping condition based on evaluation count or wall clock time or whatever.