This might seem simplistic, but removing zombie companies does contribute to a thriving economy

As less capital (labor, land, financial capital) gets tied up with zombie companies, that capital is access to more productive companies.

Those productive companies grow and contribute to a growing economy and stock market.

Lehman Brothers was a major zombie company that went bankrupt. While many lost their jobs, those people were able to work at FAANG companies and other productive startups and see renewed success. Investors that cashed out of Lehman Brothers were able to invest in those startups or other productive businesses and see higher returns on their investments. The productive businesses themselves were able to find more land to expand their operations as Lehman Brothers moved out of the office buildings and other areas.