They don’t count dead people. Well that’s a relief!
However, they do count inactive members they have lost touch with altogether, until they reach the age of 110, at which point they assume they must have died. Needless to say, some people die before reaching the age of 110. So it is likely that a number of dead/inactive Mormons are counted.
https://religionnews.com/2018/04/13/mormon-growth-continues-to-slow-especially-in-the-u-s/
Mormons baptised 233,729 (living) people in 2017, which is fewer than JWs. Plus it’s worth bearing in mind that Mormons baptise new members as quickly as possible (within a few weeks, if they can) and often these new members disappear from the church as quickly as they arrived.
In my local Mormon congregation there is a young local man who was baptised last year and has become active in the church. At the same time he got engaged to one of the missionary sisters and they plan to get married later this year. In his case he will probably stick to the church, all being well in the relationship, because of those personal circumstances.