Yes, in order to hide a user from appearing in the list, they need to be filtered out by doing the following:
  1. In the list, add the User Detail object and attach it to the proper User Base object. 
  2. Go to filters and add the filter User Detail.Deceased and set it to False. 
  3. Save the list and preview the results.
The deceased user will no longer display. Make sure the deceased user is marked deceased in the Core profile.