Why is my `out of the word` code not running properly?

import random

WORDS = (
    "Treehouse",
    "Python",
    "Learner",
)

def prompt_for_words(challenge_word):
    guesses = set()

    print("What words can you find in the word {}?".format(challenge_word))
    print("(Enter Q to quit)")

    while True:
        guess = input("{} words >   .".format(len(guesses))
        if guess <= challenge_word:
            if len(guess) < 2:
                if guess.upper() == "Q":
                    break
                else:
                    print("Guesses must be at least two characters. Try again.")
                    continue
            guesses.add(guess.lower())
        else:
            print("words must be in challenge word")
        return guesses

def output_results(results):
    for word in results:
        print(" * " + word)

challenge_word = random.choice(WORDS)

player1_words = prompt_for_words(challenge_word)
player2_words = prompt_for_words(challenge_word)

print("Player 1 results:   ")
player1_unique = player1_words - player2_words
print("{} guesses, {} unique".format(len(player1_words),len(player1_unique)))
output_results(player1_unique)
print("-"*10)
print("Player 2 results:   ")
player2_unique = player2_words - player1_words
print("{} guesses, {} unique".format(len(player2_words),len(player2_unique)))
output_results(player2_unique)

print("Shared guesses:  ")

shared_words = player1_words & player2_words

output_results(shared_words)