That this has unsettled me, TW talking about ‘passing away’

It’s very normal OP. My son did the same at age 5. We talked about it a lot as my mum was ill and it made it easier for him to understand when she did die.

I agree with others. Your DD has likely heard about this at school - possibly another child has had a bereavement.

Don't be freaked out about it otherwise your DD will learn that death is a scary thing, when it's a completely natural thing. Use it like any other learning opportunity and talk to your DD in an age appropriate way about life and death. I also agree you should be gently factual and not say things like "they're in the sky" or "they're looking down on you" in case it unsettles them.

Normal in my experience. At that age my dd said to me "Mummy, when I die, I want to be put in the hole with you". It felt pretty macabre at the time, but it was just her little mind trying to process the concept of separation by death. It actually makes me a bit teary thinking about that conversation with her now (she's 7).

Completely normal behaviour. She's showing curiosity about life and death, and exploring this through her toys. My daughter started talking about death around age 4. These are important conversations to have in an age-appropriate way.

Other than my personal loathing of euphemisms to explain death, I think it's a positive thing to talk about.

What specifically concerns you?

Death is a fact of life, all kids have to get their heads round it.

theconversation.com/how-young-children-understand-death-and-how-to-talk-to-them-about-it-96134

My daughter would helpfully calculate how close people were to death at this age.

That gave me a smile. I remember a friend’s DD greeting her great granny with a cheery “you’re still alive granny” which equally used to make granny laugh quite heartily.

Why wouldn't she know at 5? Our dog died when I was 6 and I was very upset, I definitely knew what death was by that age.

I think it’s normal OP. They’re trying to get their head round difficult ideas at this age and play is a big part of that. My 5 year pointed out a cemetery by a church as we were driving past the other day and said ‘that’s where the dead people go under the ground’ - I haven’t ever talked about graves as had no reason to, but he’s picked it up from somewhere, they’re like sponges. His 3 year old sister then asked with concern whether if people walk on the ground they sink underneath and that’s how they become dead…and they both had a long discussion about it all. I try and be matter of fact and answer questions truthfully, obviously in an age appropriate way.

My daughter would helpfully calculate how close people were to death at this age. My mother’s partner died and we had to have the talk about old people dying being natural. She shared this knowledge with some of her nursery class and when someone’s grandma came to pick up another kid my daughter explained that her grandma would probably die soon. 🙁

I think they have been playing games at school, and she is continuing to roleplay with her teddy, all of which is perfectly normal. Concept of death is vague at this age, thus her idea of 'passing away'. Some children, possibly in her class, will have already faced bereavement, whether family member or pets, and using play to express this concept is all normal. Don't worry

I think it's fairly normal at that sort of age to become more aware , my son went through a stage of being very upset over the deaths of family members that he has never met .

Sounds to me like she is just finding aware to understand it .

Death is a very hard concept for kids to grasp and they definitely think it through in their heads. I suspect someone at school has had a bereavement in their lives or they’ve seen footage of the tragic case of the children who lost their lives recently and whose funerals have been extensively covered.
For some, it’s a one time conversation they never think of again, for others it’s something they’ll try to work out.
I remember one of mine asking at a very young age what happened when a person died and it floored me, triggered by the death of someone close to their nanny. This is when some families will talk about the after life, some talk about the circle of nature.. I’d avoid euphemisms like going to live in the sky with the stars as frankly that is terrifying to kids who don’t even like the dark.