Museum specimens generally shouldn’t be uploaded as observations to iNaturalist unless done so by the original collector. Staff have previously expressed that they don’t want iNat used to get collection info into GBIF as this isn’t the primary purpose of iNat (and collections have better solutions available to them).
The best practice is generally to mark as “captive” if the location of the observation is in the collection itself - the organism was taken captive and moved to the location because of a human’s intention (not the organism’s own movement or a natural process). I personally wouldn’t bother to annotate as dead myself, but I don’t think it’s incorrect to do so.