Only in their account.

Member 1 = Silver
Member 2 = Blue

Member 2 has not flown for 3 years, and has not earned any miles in their account for 3 years. Member 1 has obviously flown and earned miles to hit Silver but this year they're dropping to Blue. There has been no activity to redeem miles (which is pro rata so counts as activity in all accounts) hence the only account that has been active in 3 years is Member 1. The moment they drop to Blue, their account remains fine but Member 2 now triggers 'no activity for 3 years and no status members, I need to be reset'. Member 1 retains their miles, Member 2's miles get zapped.