Standing a character mid-challenge does not remove it from the challenge. Kneeling the character is part of declaring the character as a participant in the challenge, but it is not a requirement for any character to remain participating or to count its STR in the challenge. The same is true if you try to remove an icon from a character in the middle of a challenge.
Once a character legally becomes a participant in a challenge - either as attacker or defender - they can only be removed from the challenge by an effect that specifically says "remove them from the challenge," or that removes them from play. Changing the requirements that made them eligible to participate will not "retroactively" make them unable to participate, or continue to participate.
So, if you stand a defender, you do not remove them from the challenge. Rather, you help your opponent out because standing characters generally have more options than kneeling ones.
Out of curiosity, how were you getting the power on Catelyn in order to make her a legal target for Obey the King?