Seems like they should not show up, since in most cases they can't be removed. When people leave a company it'd be nice to be able to at least not have them show up when a user browses the "people" directory.
This is a bug in Confluence: https://jira.atlassian.com/browse/CONF-16477
I'd encourage you to vote/watch/comment on the issue as you see fit. The more attention the issue receives, the more likely it will be given priority on the backlog.
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