Maybe, if these Engineers are smaller than the ones in Prometheus, it makes the case that life in general is doomed to regress at some point. That could also give credence to the idea that the ancient Space Jockey ( ancient until retconned
) is the same species as the Engineers in Prometheus and Covenant, but way taller because way older, from a time when Engineers as a species had not yet started to regress.
Perhaps that's why they started creating life, in the same way that humans are turning to A.I. at a time when their civilisation seems to be in danger. Noticing their species was starting to get smaller, they began experimenting with the black goo to figure out how to create and "grow" new species derived from them. The same way we are currently trying to perfect A.I. that may replace us.
As for Engineers being all killed, I doubt it. Since they've been travelling across space for at least thousands of years, and since we know they can terraform, it makes sense that they'd have colonised some other planets or moons.