I agree, that would be very cool. Although I have no idea about the technical side of implementing this. Probably hard, since it's not in already.

It shouldn't be hard. Or rather, you'd have to ♥♥♥♥ things up for it to be hard.
I think this is either just not yet implemented (low priority) or it's a design decision.
It could be about performance, too. Like, how many dead bodies would you keep? What if they pile up?

Once a character is dead the model is replaced by a static model with no collider. I remember playing around with this in Arma and was amazed by how many of these you could have without any performance impact what so ever. I mean, hundreds on the same screen. As soon as the ai was dead the code replaced it with a static copy and removed the ai. With the ai enabled it was like 5 fps and without 80.

I suspect Squad is way better optimized compared to Arma so it should work I think.

You can do it, I work with ue4 not the sdk and its possible. I'll download the sdk, and make that mod for you bud, however it will have to be server side I think