They're watching the end of the world. They will not have a happy ending.
I understand what you're saying and the horror we (and the characters) are meant to feel, but we don't see a nuclear explosion, which would utterly obliterate the house, Mike, Velda and everything around in a blinding split second flash. What we see is a pretty ordinary explosion, like a house being set afire then dynamited, which is presumably what they actually did to create the effect.
I do like the longer, original ending because it provides more closure. I think Mike and Velda do survive, although obviously it's an open question and meant to be so.
As for the comments that Mike would die from the radiation burn, that is not at all certain. It would depend on how much radiation he absorbed. If his exposure was limited to just that burn, he might very well survive. In any case, the science of the entire "nuclear" storyline is pretty much nonsense, so there's not really any basis for conclusion one way or the other.
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