Inactive users are users which account was disabled or deleted in Azure Active Directory (AAD), or users that have been enrolled in the training, but then they cancelled their registration, or an admin cancelled their enrollment, or the users who have been removed from an AAD or Microsoft 365 group thus removed from the courses and training plans that the group was enrolled in.
You can download reports with your deleted users unless you don't purge the users' records.
To download reports with inactive users, in the LMS365 Admin Center navigate to Training Management and select Training Reports. The report will include information on inactive users only. Find more about the catalog reports on training and users in this article.