How are Badass Tokens infinite?

Tokens are theoretically infinite* (it's probably a 32 bit int or something unfeasible to actually fill, anyway). You can reset challenges on a character you've completed more than 80% of challenges on, so you can always earn more tokens, even with a limited set of characters.

You do NOT silently aquire more tokens after completing a certain challenge; rank 5 is the highest rank for any single challenge. There are however a LOT of challenges so it's easy to get tokens without realizing it.

I think I just found the answer as I wrote the question, but I'm not really sure, please let me know if I'm mistaken.

After starting a new character, the challenge status of a previous character is not used again. So each new character can complete all challenges again, gaining more tokens. Since it is possible to create an infinite amount of characters, one may gain infinite tokens this way.