I was thinking the whole thing might just be a one time thing to imply to Jack (and whoever he might later tell of what he witnessed) that they care deeply about each other as evidenced by how ceremonious their funerals are, perhaps they usually string up the bodies in the middle of "town" and throw rocks at the vultures that come to eat them.

Or it could be genuine and although we do not yet understand their ways they are actually the wisest people on Earth and are up to some serious but worthwhile lesson teaching to "our guys" through completely staged events.

Or everyone on the island but Locke is made from the smoke... he is the only survivor and the whole thing, and even events such as this funeral that play out while he is not present are done for his benefit.