When he found out that he was going to compete against a "Zionist" on February 1, he withdrew from the competition.
From what I can tell, the World Taekwondo Federation has no rules about a situation like this, although the Israeli team can file a complaint.
Most of the competitors in the tournament are from the Mediterranean region like Cyprus, Greece, Israel, Lebanon and Italy, with a few Swedes scattered in.
Faraj is being hailed as a hero. The concept of hero in the Arab world seems to have changed from someone who wins a victory into someone who runs away from the fight - what others would call a coward.