Completely disappeared without a trace. And deserters, who should have been brought back from previous installments of Heroes.

regarding knights and undead...
there's a suggestion that the developers decided it was too simple... after all, think about it:
skeletons are dead people, zombies too, ghosts... why not? vampires and liches were also people (mages, etc.)... it's all the same... knights were people too... so they decided to make undead... like creatures from the afterlife... that's definitely not a human anymore... they're too big...

P.S. a bone dragon is also the corpse of a living dragon, just like the other corpses of people.