New Redemption Grab Bag now includes an assortment of 500 cards from five (5) different expansion sets. Available at Cactus website.
I am not an elder so someone could easily correct me, but according to the printed ability, it could easily be ruled as an instead (remember "instead" wasn't created until much later and some cards were retroactively made insteads) however the errata/play as implies otherwise.
The Play As/Errata says "All male characters defeated (by a win or stalemate) by Potiphar's Wife in battle..." that to me implies it checks during battle resolution not when a character gets removed by a special ability, so PW would only capture characters defeated by numbers.
Finally in the case of Moses Kill Egyptian or any other interrupt the battle card, PW's ability would be interrupted and not be able to capture the character, since it would follow the same rules as the Archer's, in that it's a delayed trigger that is interrupted and won't have a chance to reactivate until after the ability on the interrupt is complete.
Abilities that describe an end of battle condition (ex: If defeated, If character defeats, If rescue attempt fails, etc.) followed by instructions about what to do when that condition is met, have an implied “instead” which causes the effect decribed in the ability to replace other effects if the condition is met.
A Hero is defeated when: The Hero is removed from the field of battle because of a special ability. The battle ends with the Hero being discarded by the numbers of the Evil Character(s) in battle (except in the case of mutual destruction). The battle ends in a stalemate.