I managed to down the challenge boss without any equipment equipped or item use, so no heals or gear on my character at all, no guns, grenades etc.
I can't do no damage though yet, it's a bridge too far, I always get hit by something. Was lowish hp when I killed it, but I think that's good enough for me
There are indeed upgrades in the tree to improve on perfect dodge and parry, you can also equip this on your exoskeleton thing in the challenge boss pre-stage bit before you enter the room.
Game definitely seems to favour parry though, but I think dodge has it's place and using both will be viable.
I really want to get back to playing the actual game here, sadly got to wait.