If a leader is in a holding cell, can be played in a battle the prisoned leader house card? 

I think that the rule book says yes, but it makes no sense to me. Correct me if i am wrong. Thanks.

Yes-the House Card role in Combat always seemed odd to me,like some of the characters  represented were not Milirary commanders.I  decided that the name on the Card was just fluff & that the Card just represented the Battle Plan,quality of the troops involved & such.

I play happier now.

OD

But when your leader is executed, the leader token and the house card corresponding to that leader are permanently removed from the game. So, there is a connection between the leader and the house card corresponding to him. Analogically, if the leader token is in the holding cell, you should not use the house card representing that leader. But this statement is not in the rule book.

Maybe the troops are making a heroic effort to free this leader, which leads to the results seen on the leader card? (Just trying to rationalize it...)

Imagine it as influence that a leader has over his bannermen. While a leader is captured his bannermen press on to rescue their liege, but if he is murdered all hope is lost.

But lore (and reason) aside, capturing a leader is already a great blow to the loser - losing one of the most powerful leader cards in the process would be too much (seeing how leaders are usually linked to strongest cards).

I.E. you can knock down Greyjoy military might by 3 just by capturing Balon (STR2 leader when activated, +1 ASOS House card (Balon is STR4, Dagmar Cleftjaw being the next best thing with STR3))