Addresses from dead domains are like zombies. They exist in your list and look kind of like the real thing (i.e., valid addresses that you can send to). They may have been on your list for a long time, maybe since you started collecting addresses way back when. But, like zombies, they are mere shadows of their former selves.
When compliance folks like me talk about dead domains, we are referring to addresses within a sender’s list that are from domains which are no longer in business, or are no longer providing mail client services. Having addresses from these domains on a mailing list is an indication to any good compliance specialist that the list is in dire need of clean-up, or that the list owner may have purchased addresses. Neither of these scenarios is good for the client’s sender reputation, nor the ESP’s overall reputation.