Too bad the movie is quite clear that Tyler dies. In fact, it makes no narrative sense for him to still be alive, since it means that the big showdown was completely pointless. You’re supposed to see Tyler, think he can’t be stopped, and then find out that he can–but only by the Narrator doing an extreme action that he would otherwise never do.
Applying real world logic to the movies is all great and good, but you can’t violate the original narrative.
The books lets us know that the fight is not over. Tyler’s Army is still intact and looking for orders. If the narrator will not lead, another will step to fill the void.
The people who are in charge of the Narrator in incarceration are Project Mayhem members