you need to remove the paws first, you can get them back with cat gloves afterwards (they'll automatically become wolf paws as long as you have the wolf legs) but you can't remove the collar when you have paws, but can remove it like any other corruption if you don't have the paws
same way you remove any other corruption, go to either the hot springs or the main village, open the corruption menu (bottom left), find the one that says "Arms: Werewolf", and then click and hold on it and it will go away if you have enough crystals (you need at least six to remove the paws)
after you've removed the paws the collar is removed the same way, just with a different name. I don't remember the exact name, so just look for the one that has a collar as its icon