we applied on apr 30. left on may 13
Okay. My best
guess is that this is a somewhat-routine PFL based on the fact that your spouse left and clearly does not fit the definition of the inland class under which she applied. (Leaving aside for the time being that you did too). Quite likely IRCC simply looked up her entry/visa/etc info and were informed that she'd left the country. (You did know that was likely, yes?)
Separately from the main question, she should do biometrics and medical - asap - and submit info about doing that to IRCC.
Assuming that the event (your father passing, condolences of course) happened after you applied, I'd just lay the cards out - respond with a letter of explanation and tell the truth, possibly offering to withdraw the app, noting the death of father. Include the information about father passing. I personally don't see a reason to be concerned about misrepresentation in this instance. Your app might still get refused (or you decide to withdraw) but can re-apply later without prejudice.
If your father passed before you applied, that raises the possibility that you applied
with the intent of departing only shortly after and leaving for an indefinite period. Which would make her ineligible to be sponsored, and you ineligible to sponsor. And if they wished to treat this as misrepresentation, I believe they could.
And if that's true: bluntly - get a lawyer. While the individual thing here may not be that big a deal, that would make at least three times in this short thread that you've left out important details, evaded an answer to a direct question, and even after this being pointed out, once again left out the bit about the father passing beforehand. If you handle this on your own, you've got a risk of making things worse by doing the same with IRCC. Seriously - even if your intent is to be open, I suggest you are not a good judge of what types of omission of information will be seen as significant.
And if you think I got annoyed, I don't suggest seeing how IRCC officers might react.