It could just as easily imply that I should buy a ticket using my phone.
Again, to me that would be a strange interpretation. Why tell someone to "be prepared" to do something rather than to just do it?
Pay when challenged is not honest. It's a way to avoid paying.
Except when it's specifically allowed.
To me the announcement is giving that permission. Clearly not everyone thinks so and I may be in a minority, but it's not just me.
I think Weekend First used to work like that (though looking at LNER Weekend First and TFW Standard Plus it looks as if you're now supposed to find a guard and ask first).
And of course if you board a train at a station without ticket selling facilities you aren't required to chase down the guard - you just get on and should be prepared to pay when asked for a ticket (and, of course, failing that after getting off the train if possible).