This is the situation. My opponent declares a team attack on my character with two of his characters. Once the attack is legal and my opponent taps his characters, I then remove one of his characters from the attack(say via Overload). The remaining character is still attacking my character.
My question is, is that character still considered to be team-attacking? Does it cause breakthrough, etc?

It is still considered a team attack and team attacks do not cause breakhtough when attacking a character.

So what if my character that's been attacked is Lady Shiva: Sandra Woosan. Will she become a 9/9 or 12/12 now that only one character is attacking but originally two.

She became attacked the moment the attackers exhausted.

At that time, there were multiple attackers so her power did not trigger.

Since she did not become attacked again, the number of attackers is not rechecked and she gets no bonus.