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Praise be to Allah.

Firstly:

It was narrated by at-Tirmidhi (2890), al-Bayhaqi in ash-Shu‘ab (2280); at-Tabaraani in al-Mu‘jam al-Kabeer (12801), and Abu Nu‘aym in al-Hilyah (3/81) via Yahya ibn ‘Amr ibn Maalik an-Nukri, from his father, from Abu’l-Jawza’, from Ibn ‘Abbaas (may Allah be pleased with him), that he said: One of the Companions of the Prophet (blessings and peace of Allah be upon him) set up his tent on a grave, and he did not realize that it was a grave. Then to his surprise he heard a man inside it reciting Soorat al-Mulk to the end of the soorah. He went to the Prophet (blessings and peace of Allah be upon him) and said: O Messenger of Allah, I set up my tent on a grave, and I did not realize that it was a grave, and then to my surprise I heard someone inside it reciting Soorat al-Mulk to the end of the soorah. The Messenger of Allah (blessings and peace of Allah be upon him) said: “It is the protector, it is the saver, it will save him from the punishment of the grave.”
Al-Bayhaqi said: This was narrated only by Yahya ibn ‘Amr, and he is not qawiy (strong). End quote.
This Yahya was described by Ibn Ma‘een, Abu Zar‘ah, Abu Dawood, an-Nasaa’i and ad-Doolabi as da‘eef (weak). Al-‘Uqayli said: His hadeeth is not be followed. Ahmad ibn Hanbal said: He is not anything. As-Saaji said: His hadeeth is to be rejected.

Tahdheeb at-Tahdheeb, 11/260
His father, ‘Amr ibn Maalik an-Nukri was mentioned by Ibn Hibbaan in ath-Thiqaat, where he said: His hadeeth, apart from those that were narrated by his son from him, are regarded as odd.

Tahdheeb at-Tahdheeb, 8/96
This hadeeth is da‘eef and cannot be quoted as evidence. It was classed as da‘eef by al-Bayhaqi, as stated above. It was also classed as da‘eef by al-Albaani in Da‘eef Sunan at-Tirmidhi. Al-Mubaarakfoori (may Allah have mercy on him) said: Its isnaad includes Yahya ibn ‘Amr ibn Maalik, who is da‘eef.
End quote from Tuhfat al-Ahwadhi, 8/161
With regard to the words “It is the protector, it is the saver, it will save him from the punishment of the grave”, they are narrated in a sound report as being the words of Ibn ‘Abbaas (may Allah be pleased with him), as was narrated and classed as saheeh by al-Haakim, and adh-Dhahabi agreed with him.

Secondly:

The close friends of Allah, the Prophets, the martyrs and the righteous, are alive in their graves in the sense of the life of al-barzakh, which is not like our lives in this world. We cannot give likenesses in an attempt to understand how it is; rather its real nature is known only to Allah.
The scholars of the Standing Committee for Issuing Fatwas said:
The life of the Prophets, martyrs and the rest of the righteous (in their graves) is the life of al-barzakh, the real nature of which no one knows except Allah. It is not like the life they had in this world.
End quote from Fataawa al-Lajnah ad-Daa’imah, vol. 1 (1/173-174).