I also don't like it but instead of saying it's a mispronunciation/misspelling of Caitlin you could also say that it's just a combination of Kate and Lynn. Pronouncing Caitlin as Kate-lynn is wrong but I don't see anything wrong with using Katelyn as a Kate/Lynn combo.
I don't like the name Katelyn anyway. It's way too trendy and there are 1 million ways to spell it. Kaitlyn, Kaitlynn, Kaytlin, Kaytlin, Katelynn, Katelyn, Kaetlyn, K8tlyn, Caytelynne etc etc which will make it so difficult for a child.