I run a dedi server in my garage. Me and my kids still play it at least 2-3 times a week. Far from dead. People have just settled into their servers and the general hype train loons have moved on.
Maybe, just maybe, players want more new ideas rather than live services.
I'm not sure I understand why this statement is here. Palworld isn't a live services game. This isn't a "new idea"... this is how it's been for most games since the dawn of gaming... You can play offline just fine. You can run a dedi host just fine. It's a decent (not "great" but unique) genre of game that works great for my family. If it was live services it would no longer work for my family. I don't let my children onto those types of games. They're not old enough and for sure not mature enough.
It still gets updates, and before I click my dedi server I see the lobbies... They all generally seem occupied. According to https://steamdb.info/app/1623730/charts/ there's nearly 50k players playing right now... That's not a small number and puts it in top 30 overall.