The Courage have confirmed that Daniels won't play against the Washington Spirit on Friday because she refused to wear a Pride jersey.
Daniels refused to play for the U.S. women's national team because of the jerseys.
Friday's game is part of the Courage's Pride Night celebrations and will feature a Pride festival in partnership with the LGBT Center of Raleigh.
"Jaelene will not be rostered tonight as she has decided not to wear our Pride jersey," a Courage spokeswoman said in a statement.
We respect her right to make her own decisions. We're excited to celebrate the LGBTQIA+ community with our fans, players and staff tonight and we're looking forward to hosting our first ever Pride Festival before the season starts.
The Courage was criticized by supporters when they re-signed Daniels, who retired after seven seasons in the NWSL.
The North Carolina Courage acknowledged the impact of the re-signing of Jaelene Daniels in a letter to fans. We've been reading your messages and reflecting on what we've done. We are very sorry for the hurt we have caused.
The decision to re-sign Jaelene was not an easy one. Ensuring the safety of our players and maintaining an inclusive, respectful space for the entire team are the main priorities expressed in those conversations.
In December, Daniels released her own letter in which she wrote that her love for her Courage teammates has never been based on their identity.
I want people to know that my love for them is not based on their beliefs or sexuality. I believe that my teammates know how much I care for them.