Speaking for my own experience hiring new college grads for 30+ years-- it depends.
The gold standard for a transcript/application is a kid who has challenged him/herself. How that manifests itself- well, that varies based on the person, the college and other circumstances.
A kid who chooses classes to “protect” the GPA- i.e. the easiest version of every required course, the watered-down topic instead of the intense academics, only takes classes in subjects he/she is already good at- that’s not challenge.
In some colleges, taking the honors path is a good signal that this was not the case. In others, it’s the easy way out (i.e. not harder or more rigorous, just a different designation or easier to register for). So it depends.
There are also lots of ways to demonstrate “challenge” that aren’t classroom based. Being in charge of research for an award winning debating society sends a different signal than being in charge of spring break planning for a sorority. Taking a leadership role for a university committee on evaluating how to make three 19th century buildings ADA compliant sends a different signal than working on the team which plans the senior week beer bash.
Kids get caught up in “I need an A in Buyer Behavior if I’m going to get a job in advertising”. Sometimes it’s more relevant to an employer that you got a job in Alumni Relations your senior year evaluating past ten years giving trends and making recommendations on how to better “sell” the university to its graduates for a better hit rate for the annual campaign. Do that and you can skip “Buyer Behavior” and take a class in Russian Literature or Civil War.