Hydracaena

Question : If my opponent uses a Spell or ability talking about "target Character" and all my Characters are Tough, what happens?

Answer : When your opponent casts a Spell or resolve an ability that can target one of your Tough Characters, they decide if they want to pay the extra mana to make one of your Tough Character a valid target. If they choose not to (because they don't have enough mana, or because they don't want to), the effect resolves as if your Characters were untargettable.
Depending on the effect, it might mean the effect may simply do nothing, or it might mean they must target one of their own Characters.