i don't know for sure, but I would think it would be bad and unhealthy to burn incense TOO close to your cham's cage.. I would want good oxygen for my cham, you know? But that's me.. I , myself, don't enjoy breathing incense. I enjoy a hint of the aroma from a distance, but not too much to where I can see the smoke, if that makes sense? And imagine how brutally strong it would be for a cham and his/her little lungs.
That's just me though. To each their own, but I'd keep the incense at a good distance
I wouldn't do it based off of no concrete informaiton, but the experience that chams are very sensitive to pollutants. Smoke of any kind generally contains carbon monoxide among other chemicals that could potentially be harmful to your chameleon. I know that smoking around a chameleon is not kosher