“... Suppose they could of done that to keep their name off of whatever they wanted to use? ”
There's a lot of (strange) reasons people make over entities to dead players. At one time it was possible to tell if a player was dead/dropped by attempting to make over an entity to them which would throw an error like "This player is dead." I'm sure before everyone knew this was no longer possible a lot of players had made over entities to dead players trying to find out if they were actually dead (in this case the character you're talking about). Also, as you said, it does provide a form of "identity security" to make over entities to a dead player. Though, honestly, it'd be just as easy and more secure to find an inactive nublet character, arrest them and hold them on your ship with yourself assigned as captain. Then you can get your entities back by simply executing the nublet character.