When this person comes up in conversation just say something like "oh, I dunno if you heard, but {dead name} transitioned; {he/she/they/etc} go by {chosen name} and use {pronouns}"

That is not a harmful use of their dead name; it's informative and prevents the use of their dead name in the future, since all conversation from that point on will use their chosen name.

(Obviously don't do this if someone is not out publicly, or there are safety concerns)