• I make sure to select Tabular View (by clicking on the name of the object in the tabline.
• Then I creat a Field Set that includes the Record Owner. That name is usually simply "Owner" -- but if you can't find it, you can search on just owner and the proper field will come up.
• Then I name the Field set "Owner Set" - or something that makes sense

Use the "is among" option.
You will be able to select everybody on your list.

Check each one that is on the Deactivated List.

Click SEARCH!

Here's what it looks like when it's done.

And click Update All. Because our list includes any and all of the deactivated Users, we can update all of them at once.
Or, if you get a message that you need to check at least one record, click the checkbox at the top of the list, and they'll all be selected. Then click Update checked.

Click Update
I've Saved this Action, so you'll be able to access it going forward.