Sideline Knockouts

So what is the correct procedure, I only have the basic rule book and not sure if this is covered.

A character on my opponents sideline is knocked out for example slot #3, the character is obviously defeated.

Does the character go into the winner circle immediately along with my #3 character or does it occur when the corresponding match comes up that they go into the winner circle?

So if I have a character in that match slot with an active or cost triggered effect like for example Yoko, or Elder Toguro the Indestructible would they be still usable or would they be in the winner circle is my question. So that would tie in with the first situations response.