At this the Jews exclaimed, “Now we know that you are demon-possessed! Abraham died and so did the prophets, yet you say that if anyone keeps your word, he will never taste death.
Note the difference of verbs used by Jesus and then by the Jews in referring to what He had just said. Both were at that time used to indicate dying, so the Jews were not misquoting Jesus, but they were certainly misunderstanding Him.
The reasoning of the Jews is that all the great men of the past are dead (Zec 1:5), so this claim of Jesus is obviously something they could not accomplish and therefore must be false. They are operating on the false assumption that Jesus is not greater than Abraham or the prophets.
Zechariah 1:5 Where are your forefathers now? And the prophets, do they live for ever?