Let $T = (V, E)$ be a rooted tree with an even number of vertices. Prove by induction that there exists a set of edges $S \subseteq E$ such that every $v \in V$ is incident with an odd number of edges in $S$.
I was wondering if my argument is sufficient to prove the statement above:
Base case: $|V|=2$, there is only 1 edge and both vertices are incident with 1 edge $->$ $S \subseteq E$.
Inductive step:
Let $|V|>2$, implying that $T$ has at least 2 external vertices. Let us choose two arbitrary external vertices $w,u \in V$. Such vertices are only incident to 1 edge each, $e_w$ and $e_u$. We can say that $e_w,e_u \in S$.
By induction, there exists a set $S$ in $T'=T-\{w,u\}=(V',E')$ such that every $v \in V'$ is incident with an odd number of edges in $S$ because removing 2 vertices from a tree with an even number of vertices maintains the property $|V|=2n$.
As noted in the comments, your proof doesn't work.
The null graph on $0$ vertices clearly satisfies the condition. For some $n\in\mathbb N$, assume the condition holds for all rooted trees with $2n$ vertices, and let $T$ be a rooted tree with $2n+2$ vertices. We may choose $v$ to be a leaf of $T$ of maximal depth, and take $u$ to be its parent. Either one of three conditions may occur:
Since each of these three possibilities cover all the possible cases and each supplies an edge graph such that each vertex is incident on an odd number of edges, our proof is complete.