The K2 Management User SmartObjects Get Users method displays deleted users. These accounts no longer exist when searching in Office 365's Portal Admins Deleted Users section or in on-prem Active Directory. Somehow K2 is still holding on to it and this creates a confusion for the end users.
The User SmartObject under the Management category is designed to query the SharePoint User Information List. This list can accessed via the hidden url (i.e. site_url/_layouts/15/people.aspx?MembershipGroupId=0). Unfortunately, Sharepoint does have a tendency for not updating this list (active/deleted users) and it creates a problem when using the Management_User SmartObject.
To resolve this issue, remove the deleted user from the User Information List. A recommendation is to use the Azure SmartObject instead of the Management_User SmartObject as it’s calling dircetly to Azure Active Directory for the data, which will resolve the correct user information.