whether a game is “dead” or not only really matters for online games with matchmaking. If a game requires a large playerbase to function, like an MMO or a matchmaking based competitive game, the game can die. This doesn’t apply to single player or small scale coop games.
Anyone will get the full single player game experience even if they are the only one playing. If the game has multiplayer, like coop or vs play where the expectation is that you will find the person who you will play with, the game cannot die.
Calling palworld a dead game is just as nonsensical as calling starfield dead because of a lower playercount. It literally doesn’t matter for this kind of game.
At most it matters to have a healthy player count to get quality guides/videos/forums, which don’t always matter, but are nice to have. Palworld still has a pretty good base for that though.