Tom Dearden, rather than Sam Walker, was selected to partner Cameron Munster in Australia's halves for Saturday's match against the Cook Islands.
Walker was named in the No.20 jersey when the team was announced on Tuesday.
The Kangaroos are in Townsville for the round-three fixture at Queensland Country Bank Stadium, after unconvincing performances against New Zealand and Fiji.
Contract uncertainty has also drawn attention, after Walker and Hudson Young saw their NRL clubs, the Sydney Roosters and Canberra, withdraw lucrative offers.
Unless negotiations resume, they will become free agents on November 1.
Martin said Walker had remained positive and led a training session despite the news.
"We were all a bit shocked by it, but he's been great," Martin said.
Australia's squad includes 11 players approaching free agency, among them Munster, Harry Grant, Latrell Mitchell, Bradman Best, Jack Bostock, Isaah Yeo and Martin.
"We're all getting into one another, going, 'Oh, where are you looking at on realestate.com'," Martin said with a smile.
He said the banter had not disrupted the squad's focus during training.
Martin, 29, hopes to re-sign with Penrith, where he has won four premierships in eight seasons.
He said Yeo, Nathan Cleary and Moses Leota were also seeking deals, but Penrith remained his preferred choice.