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When generating a report, you are querying data within the Protect database (rather than current domain information). You can certainly use the advanced filter to specify which records are included (e.g. specific scans) in the query. If you are reporting on current status, you will be including the most current records for every machine in the database. If records still exist for the machines no longer residing physically (or logically) within the environment, they will still be included in reports which reference those records (e.g. 'current status' reports).
The machines' records can be deleted from the database by selecting the machine in a refreshed Machine View, then choosing to delete from the alternate (right-click) menu. Old scan records can also be deleted via the 'Manage>Items' menu.