Piccolo challenging Vegeta isn't necessarily a take on his own power, but his personality instead... it's true that he won't pick up a fight he knows he has no chance, but he will also not let someone arrogant as Vegeta to talk shit and have his way out. Also, interesting enough, Piccolo does react kind of in a different way in the Mecha Freeza saga when Vegeta does taunt him compared to his other "scuffles" with Vegeta where we know he was stronger. In the Freeza saga he still keeps his cool and just calmly tells Vegeta that his turn will arrive... the same with his post Kami-self, where he doesn't even reply Vegeta back and allows Vegeta to have the last word, a pretty "harsh" last word worth saying, in which Vegeta asks Piccolo if this latter wants to be the 1st to get killed. Here in the Mecha Freeza saga Piccolo is visibly more annoyed at Vegeta's provocation, with his arms up and even with his tone of voice raised if we do consider the anime... in contrast Vegeta doesn't seem to be annoyed at all at Piccolo and we kind of do see how annoyed Vegeta gets when someone stronger than him does taunt and/or challenges him (e.g being annoyed at Goku stating he's way stronger than Vegeta and also being annoyed at Kamiccolo talk back to him when he also knew he was severely outclassed).
Piccolo's reaction towards Vegeta's provocation does remember me more his reaction towards Raditz taunting him, where he does look visibly annoyed, like if he were aware the provocation is coming from someone of superior power IMO. I don't think it's comparable with him taking a shot against 2nd form Freeza when he knew he was up there with him or him taking a shot against the Saiyajins when he at least knew he was way above the last Saiyajin that came to the Earth... it's just his ego talking louder at the moment and not letting Vegeta have his way out with those snarky comments... in the anime Vegeta is even calling the shots iirc.
I don't think Piccolo is taking the leadership at the Mecha Freeza saga. What we know about Piccolo there going off of my memory:
1 -- he is the one to apparently get there the first, but the Z warriors didn't notice him there because he was with his chi suppressed, and then he gets praised because of it by Vegeta, calling him a "true warrior"... that's far from a compliment on his strength or an indicator that he got way stronger honestly, it's just indicating he seems aware of the situation and is kind of better prepared than the others, who didn't even bother in suppressing their chi -- maybe because they thought the enemy hadn't those Scouters;
2 -- he states to Yamcha that it doesn't make a difference whether they stay there or go to fight, considering their fate will be the same... he knew fully well they were going to be killed and that they had no chance, but as a warrior he prefers to take the shot and fight in the front line than dying other way -- much like Tenshinhan in the androids saga, who also knew he had no chance but thought it was best to die fighting than any other way. He is every bit petrified at Freeza's power as are the other;
3 -- he then gets surprised when a mysterious huge chi appears out of nowhere and is surprised like the others that Freeza got killed easily;
4 -- he is the only one --besides Goku --that hears Trunks' story due to his good ears and then tells everyone the cruel reality. He also gives Yamcha nother "wash of reality" and tells them that if they don't want to train, then it's their choice, but he'll train as hard as he can because he doesn't want to get killed... also tells everyone that the enemy this time will be unthinkably powerful and that it's better for the ones who lack confidence not to show up because they'd be just dragging them out... then it comes Vegeta's provocation and his answer towards it.
Like you can see, there's not much to which you can denote a "leadership" position... he has some cool speechs, but nothing to denote this so much superiority here imo. If we take into consideration his line about showing Yamcha what was going to happen and that it doesn't make a difference whether they stay there or fight, we also have Vegeta:
--> Scolding Tenshinhan and Yamcha for not suppressing their chi;
--> Stating to everyone that that would be the end of the Earth;
--> Stating that they should approach the 'battlefield' by walking so they wouldn't be noticed;
--> Being the 1st one to fly once he noticed Freeza was killed;
Not too much different imo. Granted that Piccolo and Vegeta may have appeared more, but again, they were tye strongest ones there and such.
Anyway, that'd be my opinion on Mecha Freeza saga Piccolo's power... I don't think he necessarily does need to be that much of a powerhouse, and having him above by one level compared to his Freeza saga self may suffice imo.
