Dynamic streaming is common nowadays, as games have gotten large enough that not everything in a level can fit into memory.

I don’t know about what is actually done in industry but I feel like most of the time you wouldn’t bother with keeping dead instances unless instancing is shown to actually be a performance problem, which will probably not happen all that often

Godot for example doesn’t have built in dynamic level streaming yet or a built in way to cycle through dead instances as far as I can tell, although I’m sure that wouldn’t be hard to do with code