Interesting. 
Well, it's a bit of a complex situation but if I were to try provide a theory, I'd say that Mizukage still killed him.
Muu and Onoki surely fought Madara at that time but perhaps, after a fierce combat, Muu intelligently used his Splitting Technique. Onoki was left alone since Muu perhaps preferred to save his life. We don't really know if he was already Kage at the time he met Madara; so he might have chosen the escape route.
Once, Madara left, he perhaps went back to the village with Onoki. His fight with 2nd Mizu ensued later on where they both died. There seems to be indeed a little sarcasm when Edo Muu told Edo Mizu that they indeed died together. Surely, because Muu was left with his half his power ever since that event with Madara.
Well, we can speculate but the most likely situation will be that in some way, he indeed died at the hand of 2nd Mizukage.
Well, it's a bit of a complex situation but if I were to try provide a theory, I'd say that Mizukage still killed him.
Muu and Onoki surely fought Madara at that time but perhaps, after a fierce combat, Muu intelligently used his Splitting Technique. Onoki was left alone since Muu perhaps preferred to save his life. We don't really know if he was already Kage at the time he met Madara; so he might have chosen the escape route.
Once, Madara left, he perhaps went back to the village with Onoki. His fight with 2nd Mizu ensued later on where they both died. There seems to be indeed a little sarcasm when Edo Muu told Edo Mizu that they indeed died together. Surely, because Muu was left with his half his power ever since that event with Madara.
Well, we can speculate but the most likely situation will be that in some way, he indeed died at the hand of 2nd Mizukage.