I suspect he's captive and alive. Sabo's death would have a lot more screen time than being off-paneled. Plus, the Marines don't want to risk the Mera Mera no Mi falling into the wrong hands
HOWEVER, this does follow my theory about how Coby could end up with the Mera Mera no Mi if anybody remembers that back on OJ - so it's not impossible.
I suspect this is being circulated to lure out the revolutionaries because the Marines think they're strong enough to deal with them now. I mean, they were comfortable with abolishing the Shichibukai