Why is Morgan not "long dead"? (the current text on the matter). Well firstly, nothing in Prey actually says that he is!
Not convinced?
Consider first that the story is all about placing actually-living human memories, if not quite their actual personalities, into both machines (see January etc) and also, amazingly, into the typhon too (see the various info found in Psychotronics, especially the info found using the office-toy crossbow). Then consider too, all of the actions that Morgan started to take against his brother as his own personality gradually changed with all the neuromod reversals he had to experience (see January etc again), and it's hardly surprising that Morgan isn't there alongside Dr Igwe and Alex for this experiment.
It seems clear to me that even with the typhon-removing 'nullwave ending', typhon technology clearly managed to make it to Earth (the neurowave ending being the all-surviving real or 'canon' ending a Prey developer has apparently suggested - and the story taken as whole seems to bear this out too). There are numerous opportunities for the typhons to make it to Earth revealed throughout the course of the game too - it's hardly a surprise.
As for the 'dreamy' experience the typhon subject had at the end, it simply has to be based on modified memories, as that's the only way any 'choices' could possibly be made by it. Alex's "It probably thinks it was a dream, that nothing really mattered" (and Igwe's response) suggests to me that this is *all* the rather neuro-divergent(?) Dr Igwe's experiment, and not expressly Alex's (who doesn't really have this kind of skill) - or Morgan's. Given Igwe's character throughout, that makes complete narrative sense to me.
To me perhaps the craziest thing in Prey are all the 'replications' that Morgan made of himself (December, January, October). That seems to me to be his biggest legacy in the final cutscene - placing human memories into machines and just letting them fly. I'd love to see a clever (and timely imo) sequel where Morgan has joined some kind of Resistance set up to counter the excesses of all this technology. Danielle and Mikhaila may have things to say about the use of their own memories too! As for 'hybrid' human-typhons - for 'typhons' read AI. Boy I'd love to be part of that script-writing team. If only more people were still interested in this (not so old) cult classic.
Matt