H S Prannoy lost 15-21, 14-21 to Japanese world No. 1 Kento Momota.
World No. 31, who had shocked Malaysia's eighth seed Lee Zii Jia in the opening round, needed just 39 minutes to see off Rasmus Gemke 21-12, 21-9.
Prannoy recovered from a game down to outwit sixth seed Christie 18-21, 21-16, 23-21 in a thrilling contest that clocked an hour and 15 minutes.
It was a chaotic day and the entire procedure put us under severe mental stress, the duo told Malayala Manorama.
Both the Badminton World Federation (BWF) and Badminton Association of India (BAI) confirmed the development.
The BAI had issued a show-cause notice to Prannoy on Friday for his outburst and given him 15 days to respond.
Prannoy had launched a scathing attack on the BAI after the federation's list of recommendations went public.
'I’m not getting much support from the state association because I don’t play for Kerala. If there is nobody to support you, the job becomes easy for the people who are looking to sideline you,' says Prannoy.
On Tuesday, the BAI recommend doubles pair of Satwiksairaj Rankireddy and Chirag Shetty and men's singles player Sameer Verma for the Arjuna Award.
Kashyap pointed out that there is still no scope for practice amid the coronavirus pandemic and the BWF has drawn out a calendar made of 22 tournaments across the world in five months.