I also am not in favor of deactivating the user in this case because of the way the feature works currently. Deactivated users do stop showing up in search results, are not shown in the user list, and can’t be mentioned. This makes their posts really hard to find unless you remember some keywords!
An interesting feature request would be to make this an option when deactivating a user. In some (arguably most) cases you don’t want the user or their posts to be easily found, but in other cases (e.g. when an employee leaves a company) it’s not so desirable, in my opinion.
I see the advice I gave back in 2020 when I was community manager for Namati (and the now renamed Grassroots Justice Network) is still holding up there. I think it works quite well.
I think just changing the email address to one you are checking is fine. If somebody tries to write to the person, you can then respond to let them know they are deceased. You can also edit their user prefs to turn off the email notifications and email summary.