diff --git a/specs/phase1/custody-game.md b/specs/phase1/custody-game.md
index d4ce4640a..8185b6baa 100644
--- a/specs/phase1/custody-game.md
+++ b/specs/phase1/custody-game.md
@@ -193,14 +193,13 @@ class EarlyDerivedSecretReveal(Container):
 ### `replace_empty_or_append`
 
 ```python
-def replace_empty_or_append(list: List, new_element: Any) -> int:
-    for i in range(len(list)):
-        if list[i] == type(new_element)():
-            assert False
-            list[i] = new_element
+def replace_empty_or_append(l: List, new_element: Any) -> int:
+    for i in range(len(l)):
+        if l[i] == type(new_element)():
+            l[i] = new_element
             return i
-    list.append(new_element)
-    return len(list) - 1
+    l.append(new_element)
+    return len(l) - 1
 ```
 
 ### `legendre_bit`
diff --git a/tests/core/pyspec/eth2spec/test/phase_1/block_processing/test_process_chunk_challenge.py b/tests/core/pyspec/eth2spec/test/phase_1/block_processing/test_process_chunk_challenge.py
index 97fe0c222..94b1c3b11 100644
--- a/tests/core/pyspec/eth2spec/test/phase_1/block_processing/test_process_chunk_challenge.py
+++ b/tests/core/pyspec/eth2spec/test/phase_1/block_processing/test_process_chunk_challenge.py
@@ -85,6 +85,29 @@ def test_challenge_appended(spec, state):
     yield from run_chunk_challenge_processing(spec, state, challenge)
 
 
+@with_all_phases_except(['phase0'])
+@spec_state_test
+def test_challenge_empty_element_replaced(spec, state):
+    transition_to(spec, state, state.slot + 1)
+    shard = 0
+    offset_slots = spec.get_offset_slots(state, shard)
+    shard_transition = get_shard_transition(spec, state.slot, [2**15 // 3] * len(offset_slots))
+    attestation = get_valid_on_time_attestation(spec, state, index=shard, signed=True,
+                                                shard_transition=shard_transition)
+
+    transition_to(spec, state, state.slot + spec.MIN_ATTESTATION_INCLUSION_DELAY)
+
+    _, _, _ = run_attestation_processing(spec, state, attestation)
+
+    transition_to(spec, state, state.slot + spec.SLOTS_PER_EPOCH * spec.EPOCHS_PER_CUSTODY_PERIOD)
+
+    challenge = get_valid_chunk_challenge(spec, state, attestation, shard_transition)
+
+    state.custody_chunk_challenge_records.append(spec.CustodyChunkChallengeRecord())
+
+    yield from run_chunk_challenge_processing(spec, state, challenge)
+
+
 @with_all_phases_except(['phase0'])
 @spec_state_test
 def test_duplicate_challenge(spec, state):