It seems a bit odd, but I can't see any reason why Dodging Panache can't be used while the Swashbuckler is prone.
At 1st level, when an opponent attempts a melee attack against the swashbuckler, the swashbuckler can as an immediate action spend 1 panache point to move 5 feet; doing so grants the swashbuckler a dodge bonus to AC equal to her Charisma modif ier (minimum 0) against the triggering attack. This movement doesn’t negate the attack, which is still resolved as if the swashbuckler had not moved from the original square. This movement is not a 5-foot step; it provokes attacks of opportunity from creatures other than the one who triggered this deed. The swashbuckler can only perform this deed while wearing light or no armor, and while carrying no heavier than a light load.
The only movement options when prone are crawling 5 feet and standing up, but it seems like you could do the former with this Deed, to me?
Looks legit.