If during a challenge phase, Ser Rodrik Cassel (does not kneel to defend) kneels to attack. Is he still able to defend during the opponents attack phase since he is currently kneeling? Or is the ruling that he must be standing in order to be declared as a defender and then just stays standing after declared?

Thanks.

A character must be standing in order to be eligible to be declared as an attacker or defender. Not kneeling to attack or defend means that declaring them does not end up with them knelt - but they still have to be standing to meet the requirements for challenge declaration.