The bodies are definitely still there. I don’t know how the technology is supposed to work, but the inside of the helmet is a display that is fake. If you notice the video that is being played when they all go out to clean is identical. The same birds flying in the same spot etc… Nobody in the Silo understands what a digital video is which is why this display is so convincing to them that what they see has to be real.

Juliet was able to see through this and knew where Holston’s body was supposed to be which is how she could feel around for his leg and then put his badge on his body.