Stage 4 heroic/iron challenges are listed as tower level 2 maximum, but actually allow up to level 3 towers.
Stage 5 heroic/iron challenges are listed as tower level 3 maximum, but actually allow up to level 4 arrow towers.
Stage 6 heroic/iron challenges are listed as tower level 3 maximum, but actually allow up to level 4 towers.
Stage 7 heroic/iron challenges are listed as tower level 3 maximum, but actually allow up to level 4 towers.
I haven't checked the rest of the levels, but so far it seems like when moving from normal to heroic/iron challenges, the tower level restrictions are not changing at all. Heroic challenges allow the same tower levels as normal, while iron challenges only restrict tower type, not level.