Lavos had already fell, since the scene is happening 5 years after it, however, it did killed Lavos, I think.
And, Lavos was not exactly the one who gave the humans magic, it was the Frozen Flame. Since the FF was actually separated from Lavos ever since it was falling to the planet, it would be safe from the Atash Kedah, and as such, still being able to be found by the humans.
Notice how the Reptite time line that follows this event was caused by the Dragon Tooth reaction with the Flame in 3M BC. This definitely shows that the Flame was fine and safe.
However, that was a small miscalculation. With the reptites back again, the humans weren't able to gain magic, as the reptites were in the way now.