I wanted to place a khajit that started dead so I dragged him into the cell and set start dead option then used run havok sim to have him fall. It looks ridiculous. A lot of the time it's tail stretched to insane length, once pieces of him separated, legs separate from torso, right now his double length tail is straight up in the air not attached to his body. Fortunately it looks ok in game but what gives? Also does anyone know if such dead bodies are permanent or vanish like a normal killed npc after you have left the cell for a while? I've found various pre dead npcs in game, but I can't remember going back later and seeing if they are still there.

When you use havok simulation on a start dead actor, make sure that this actor is well above ground.

"Pre-dead" actors respawn/reset the same way as all other actors and objects. They are just still dead after they've respawned.