Hmmm, I'd say yes the enemy could still use the caveat ability. My reasoning is the enemy's controller is paying (essentially giving) Lupa's controller 2 favor to make the outcome neutral. The enemy isn't spending favor as a cost generate an effect, which would otherwise be blocked by Otho. The favor isn't really spent, but transferring.
I think it comes down to the Pay vs Spend keywords...
*I could be completely wrong on this too. Perhaps an official clarification may be necessary?
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