I actually think it's a pretty good idea from their point of view. I don't know any funeral directors where I live and God forbid we needed one, I wouldn't have the energy or emotional capacity to be searching for recommendations.
This. Most people sending out leaflets know that the vast majority will be chucked straight into the recycling, but they're hoping that a few will make people aware of their business at a time when they might be looking/needing to use a business of that very kind. They aren't taunting you about dying soon - they don't actually know you - but if you had just been bereaved or had a family member whom you knew was reaching the end of their life, you might find it very useful - comforting even - to have that info available to you in a neutral, anonymous format, i.e. not targeted at you or accompanied by a pushy salesperson. A great many people needing to organise funerals will be elderly themselves - and that's the demographic who are by far the least likely to have ready/confident access to the internet.
There will be people relying on food banks who get leaflets from the local takeaway, vegetarians receiving flyers for the new steakhouse that's opened in their town, atheists getting invitations from local religious groups to attend meetings, people who've bought their house a week ago getting letters from estate agents asking if they've decided the time has come to sell it. Even people who run a certain kind of business getting leaflets from direct competitors, claiming to be much better than all of the other similar firms in town. It's just a blunderbus approach - if you don't want it, don't need it, can't afford it or whatever, just recycle it.
It's a bit like all the websites wanting to track and stalk you in order to sell you things based on what they believe are your needs, interests or preferences. I completely understand that most websites are funded by advertising, but I for one would much rather receive anonymous adverts, and pinpoint any that interest me myself, than creepy 'addressed' ones that clearly have me personally in their sights for relentless targeting - especially when their algorithms are way off and/or reductive in assuming to compartmentalise me based on one minor characteristic.