The Canadian team said in the failed appeal that Evans should have been given a warning after receiving a third caution for the same foul.
"We are very disappointed in this decision. Custio clearly won the fight in our opinion and this is not a good day for Olympic boxing," Boxing Canada high performance director Daniel Trepanier said in a news release. "However, Custio is a very talented boxer and he should be proud of his performance [on Tuesday], and in his two earlier fights, in this his first Olympic Games."
Clayton was denied of at least an Olympic bronze medal after falling to Evans in the men's 69-kilogram weight class at ExCel South Arena 2 in London.
The boxers were deemed to be tied by the judges 14-14 after the three three-minute rounds of competition, but Evans was awarded the victory due to countback in which factors such as which fighter took the lead, showed the better style and was superior defensively are assessed.
"I thought I pulled it off," Clayton said. "But there ain't nothing I can do."
Clayton took his narrow loss with aplomb, praising Evans while acknowledging the home crowd is an obstacle just as large as the fighter.
"I didn't even hear them against me, but it probably makes a difference sometimes on the scorecards," Clayton said. "It felt like a close fight, but I thought I won."
Evans, the reigning European champion, will now square off with Ukrainian Taras Shelestyuk — who defeated Vasilii Belous of the Republic of Moldova earlier in the day by another countback — in the semifinals where both are guaranteed of at least a bronze.
The Briton's strong opening round put the pressure on the Canadian, outpointing Clayton 7-2. The latter fought back with a resilient effort to win the second and third rounds.
The Dartmouth, N.S., fighter changed tactics in the second round, moving his body more and often dropped down before springing up and attacking.
The changes worked as Evans lost his rhythm. Clayton took the round 6-3 and was right back in the fight.
The Canadian came out swinging in the final round and had the Brit back on his heels. Clayton was determined to be the aggressor and it nearly paid off.
On the defence
Evans seemed overwhelmed in the final minutes and was clearly playing defence.
"I had a big first round but I knew he was going to come back and put the pressure on," Evans said. "He smothered my work a bit, and he's a top experienced fighter so it was always going to be a tough fight."
Clayton had outpointed Australian Cameron Hammond in the round of 16 to get to the quarters.
The welterweight previously earned Canada's first Olympic boxing victory in eight years when he defeated Mexico's Oscar Molina with a 12-8 decision.
Fellow Canadian boxers Simon Kean of Trois-Rivieres, Que., and Mary Spencer of Wiarton, Ont., were eliminated on Monday.
In Olympic boxing, both semifinal losers are awarded bronze medals.
Russia's Andrey Zamkovoy has already punched his ticket to the other semifinal.