While funeral goers acknowledged that Bob was dead, they also stated that he didn't look any more dead than he did at the wake.
You have interpreted this bizarrely-written and quoted article well - I would just add something on the order of “Bob was dead but he looked better than he had for years and his body temperature was above 60, so Bob’s personal situation was much better than the news of him being dead would have appeared to a casual reader at first glance”.
Normalcy bias