From Wikipedia: "The instrumental case in Russian is not limited to its instrumental thematic role. It is also used to denote ... a predicate with a number of ... verbs, denoting state, appearance, manner, consideration, etc."

Никто не надеялся увидеть их снова живыми людьми. "Людьми" is a missing word here, which is a noun in instrumental case.

There is no instrumental case in that sentence. It is accusative. В этом предложении нет творительного падежа. Есть винительный. Отвечает на вопросы "кого?" и "что?". Кого никто не надеялся увидеть снова живыми ? Их

It's the predicative instrumental case that is used in predicative expressions: https://en.wikipedia.org/wiki/Predicative_expression.

Thanks K P, always interesting to read you. I'm going to note what you explained and think about it, obviously there is a gap in my understanding of the instrumental case, although as you said, I meet it often in literature (btw, the sentence was taken from a children book)