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This isn't the experience we want you to have. I can share additional information about hiding inactive customers in QuickBooks Online.
Hiding inactive customers across all lists isn't possible. There are specific report that displays them if they have transactions on the date range selected.
As a workaround, you can customize your report to specify which customer you want to show. I'll show you how.
Check out this article for more insights: Customize reports in QuickBooks Online.
In addition, you can also export your report to Excel and from there you can remove inactive customers.
Please don't hesitate to add any details if you need further assistance managing your customer lists or reports. We're always here to help.