I would prefer to break this long sentence.

and authentication credentials.
That is, if the target does not require CHAP authentication, or if CHAP user and secret are used during discovery, both CHAP user and secret are required to match to access the target.

Hm, that's not quite what I meant. What I'm trying to say is, the access will be allowed if 1. target doesn't require authentication, or 2. target does require it, and authentication credentials during discovery match those of the target.

That is a much clearer statement. Maybe:

and authentication credentials.
Access to the target is allowed if the target does not require CHAP authentication.
If authentication is required, CHAP user and secret must be supplied and match those used during discovery.

I'm not sure if I'd understand this correctly if I didn't already know what it does.

How about this:

The target will be returned if it doesn't require CHAP authentication, or if CHAP user and secret used during discovery match those of the target.

Minor adjustment:

The target is returned if it does not require CHAP authentication, or if the CHAP user and secret used during discovery match those used by the target.