From Archon Arcana - The KeyForge Wiki
If a creature has the taunt keyword, any of its neighbors that do not have the taunt keyword cannot be chosen to be fought by an enemy creature that is being used to fight. In the battleline, taunt creatures are slid slightly forward to indicate their presence to the opponent.
Related Topics: Adjacent, Battleline, Fight, Neighbor
—KeyForge Master Rulebook v17 April 2023
Taunt should only prevent choosing the creature that is protected by taunt. If you choose a creature which results in the battleline changing such that the chosen creature is now protected by taunt, it will still be available to continue the fight.
Source: Reddit Thread