That's a great question and a great discovery to have made so early on. I've not read through this thread - unusually, I've not read anything actually - so I'm sure a lot of what I'm about to say is covered.
Bottom line answer: Yes. I do most of my practice standing up. It also helps you to keep alert especially when doing more mundane study exercises, although I do my own things that help make them fun and musical too. I used to practice a lot more sitting down, but found that after five or ten minutes of arpeggiation exercises or whatever, I was starting to feel sleepy. Totally unprompted, a guitar friend who takes practice similarly seriously told me the same thing happened to him then I suddenly discovered it wasn't just me. So yeah. Unless I'm really doing some kind of deep theoretical study of the fretboard for a few minutes, I practice standing up. And yes, this greatly helps for live performance because, well, you stand up don't you? I've seen people totally fall apart at jams for this reason - I have a lot a lot of experience of jams; The Blues Kitchen, Camden Town. Ain’t Nothin’ But..., Soho. The Spice Of Life, Soho. Ronnie Scott’s, Soho. Troy Bar, Shoreditch. And a whole lot more, especially including jazz clubs in Madrid. Oh, and the hundred hour jam at The Blues Kitchen - a total of 24 hours on stage and the only person there for the whole hundred hours, including being on stage performing for the finale.
Think about it, especially from a bass player's point of view - I say this because that can often be the last thing you're able to hear on stage. And believe me, you can spot the bedroom players on stage a mile off. But hey, kudos to them for getting out of the bedroom and taking to the stage. And, to be fair, for putting in the practice time in the first place. But boy can you spot them.
You practice at home. Sitting down. In great light. Perfect sound - because you’ve made it so you have perfect balance of what you’re playing to to what you’re playing. Actually, a balance that’s probably skewed towards the bass being that bit louder. You also know everything that’s happening and going to happen because you’re probably playing to recorded music that never makes a mistake and doesn’t react to your mistakes. I’ve often said that practicing like this for live performance is like training to fight a tiger by playing with a kitten.
Now take the jam environment. First surprise. Although the stage is well lit from the audience, often when you’re on them they’re really dark. So dark that there are times I’ve literally not been able to see a thing on my fretboard. Then, even if you can see, you look down and, standing up, it’s now so far away and all those nice patterns and stuff you’ve been working on are just gone. They’re simply not there anymore. And where’s that lovely bass sound you’ve been practicing with gone to? Yep. Just not there anymore. Sometimes, not at all. Even though out front you’ve been hearing the bass loud and clear. As you may or may not know, for bass especially, for physically soundwave reasons specifically relating to bass, the further away you are, the better you can hear it. Which leads to the phenomenon of Ain’t Nothin’ But…in Soho. On stage, you are standing right in front of the bass amp. It’s not in the PA at all. Out front the bass sound is just perfect and really present. On stage, for the bass player, it is barely there at all. And because it’s not in the PA, it can’t be turned up like it can in the Blues Kitchen. Oh yeah. If you ever become a regular at a jam, become friends with the sound guy and learn how to communicate with them from the stage. And of course you’re with live musicians where anything can happen. And another ‘believe me’ moment. At some of these jams, and even in band situations, although you are ostensibly in a group/team environment, there can times you really are there on your own with no-one looking out for you and no-one telling you what’s going on.
Now, being extreme here, and I’ve spoken to musician friends about this and they loved the approach and adopted it themselves, I believe. I do sometimes do ‘live’ practice at home. That is, I of course stand up. I have the lights low so I can’t see much of what I’m doing, and I have my bass balanced low so I can barely hear it.
Now for a related topic. Band practice. Do not. Repeat. Do not. Practice in a circle. You end up becoming reliant on being able to see each other with loads of eye contact communication and relying on being able to see where the others are going on their fretboard if you ever feel a little lost. When was the last time you saw a band playing live standing in a circle? Oasis actually spoke of being lost when they began recording their debut album Definitely Maybe directly because of this issue - they ended up having to fully record that album three times before they got what we have now.
Related to this. If you’re doing any backing vocals - or lead vocals for that matter - in that band, practice them standing up and into a microphone. For so many of the above reasons. Me and a friend of mine had a mildly successful cover duo for four or five years and we did exactly that. I think it made a big difference to us. The two scenarios. Rehearsal: You are nicely all sat down and singing your parts while also probably looking down so you can see what you’re doing. Live: You’re standing up with the microphone directly ahead of you and you also kinda want to be singing out to the audience as well rather than looking down as you sing. Every single bit of cover and comfort you had in rehearsal has gone.
Damn. In a flash and without at all meaning to, I’ve written a thousand word essay on this.
But I really enjoyed writing all that and I really hope that you, and maybe others, can take something away from it. Good luck.