Merging records where one is deceased/inactive, and the other record is Active/alive the record does not retain the inactive status. When you decease a record, it automatically marks it inactive. You will then have to go into that record and mark it inactive again.
Download and install the latest patch, which contains all fixes from previous patches. If you are running an older version, download and install the latest version and then the patch.
Steps to Duplicate
Merge 2 records, with the following information: record 1: shows as active, shows as alive (not deceased) record 2: is deceased, is inactive
When you merge the 2 records, using record 1 as source record and record 2 as target record, the result is that record 2 is now marked deceased, but the 'inactive' status is gone, making this record active again. You will then have to go into that record and mark it inactive again.