If he is defeated or evaded, he goes back into the cup. [...]
This is not correct, according to the FAQ
Monsters in Encounters wrote:
[...] If such a monster is defeated, players may take it as a trophy (unless its special ability states otherwise).[...]
EDIT: After looking at the revised rules and the original rules, it appears that they took the old text (cited by ColtsFan76) as a first paragraph and simply added the FAQ text as a second paragraph (this is where the part I cited comes from). Therefore the second paragraph should be true.