Regragui had been given a four-match ban, with two games suspended, and fined for bringing the competition into disrepute.
The decision means Regragui, who had to watch his country’s last group game against Zambia on Wednesday from the stands, will be back on the bench for the last-16 clash against South Africa on Tuesday.
Regragui, who led his country to the World Cup semi-finals in 2022, was involved in an on-field spat with Democratic Republic of Congo captain Chancel Mbemba at the end of their Group F match in San Pedro on Sunday.
The incident led to scuffles between opposing players and staff on the pitch and alleged fighting in the tunnel at the stadium, but out of public view.
Regragui had gone to shake Mbemba’s hand at the end of the match but held on to it as he tried to remonstrate with the defender, who repeatedly tried to pull away before breaking loose.
That set off mayhem at the end of a 1-1 draw.
"He insulted me and my assistant on the sidelines before the end of the match," Regragui told reporters.
"And in the end, despite that, I went to shake his hand but also to ask him: ‘Why are you talking to me like that?’. Then he looked away like he didn’t want to shake my hand," he added.
"He claimed I had called him an idiot but I never said that. He should be a little honest with himself."
Morocco’s football federation denounced the decision, but its appeal came only hours before the Zambia game at which Regragui was in the VIP stand, speaking to his bench as assistant Rachid Ben Mahmoud replaced him on the touchline.
