Dead dwellers are removed after 24 hours.
There is an associated bug with this also. Under certain conditions, Dwellers placed in a room where the dead have been policed up by the application, will report that there are corpses still in the room (when there aren't) and their happiness will go down. The only work-around for this situation is to destroy the room and rebuild it.
Either way, after 24 hours, the corpses are deleted along with their gear.
How unfortunate, also have one room without a dead dweller but then the happiness and comment of the other dwellers are it has a corpse around them. Thought of upgrading it first. But if you already did that then i should follow destroying the 3 merged rooms. T.T