The regiment was released on exchange at Vicksburg MS in early September of 1862:

http://www.tngennet.org/civilwar/csainf/csa32.html

As mentioned, the 32nd Tennessee Regiment was reassigned to Murfreesboro TN during the following month. If he died at Murfreesboro in Novemeber 1862, this soldier was in camp and definitely not in prison when he died.

If you don't have copies of his service record, click on the link above, titled 'Military Records Research Services', or contact me at cssoldier@hotmail.com