Inactive Users assigned package licenses show up as active Users of the package

To free up a managed package license after deactivating a user, you must manually un-assign the license from that user in the Installed Packages settings by following the below steps:

1. Navigate to Setup
2. Type Package into the Quick Find box, and click Installed Packages
3. Click Manage Licenses next to the impacted package
4. Click Remove next to the inactive user, or Remove Multiple Users to remove from more than one user at once.

Best Practice: It is best to create a list view of inactive Users and then click on each User record to determine if a package license is assigned, so that licenses can be proactively freed up after user deactivation.