Alright, listen up, churls! This is how souls do.
Our conclusions generally came with backing motivation of keeping options open, keeping ambiguities present to be explored IC, and to provide opportunities for storytelling.
Diffused around the universe is soul ash. This is the raw substance of souls. There's more of it closer to the Sky of Pyres but it's present throughout every sphere unless otherwise specified. It's imperceptible to most mortals. It even escapes gods at times, the individual motes mysteriously disappearing at times only to reappear somewhere else in the universe.
When living beings are created, soul ash coalesces naturally into a soul within them. This natural coalescence is the only known way to create a soul. Souls come in all different shapes and sizes, generally dictated by intelligence and personality. If a creature loses its soul, it loses the intelligence and personality that caused the soul to coalesce in the first place.
Souls degrade (or fray) over time without some kind of treatment. The exact amount of time and rate of fraying varies from soul to soul. The effects of fraying can take the form of some mix of mental and physical degradation but the exact symptoms are up to the author. The only constant is that this continual degradation generally results in souls losing their will to resist Katharsos' vortex.
The degradation can be prevented in a great number of ways that can be explored IC. It doesn't have to be restricted to god stuff, but heroes, demigods, and gods don't suffer this degradation because of divine essence or an MP product holding them together.
Souls do not have to be coupled with divine essence and vice versa. Gods are just discreet amounts of divine essence. If they exhibit the intelligence and personality of a being with a soul, they more than likely have a soul themselves. That said, there could be a divine essence without a soul. It probably wouldn't be intelligent like the gods we know are.
Instances of divine essences without souls mostly occur when a god 'dies': The divine essence scatters and the soul of the 'dead' god goes on its way, probably to the vortex. The essence, however, reforms after a while. It reforms into a living being, into which a soul inhabits. Boom, new character. This is generally how we can justify dropped players being replaced with new players gunning for similar portfolios.
A neat detail: This opens up the option of an unintelligent divine essence without a soul doing all sorts of shenanigans.
Just about everything else can be handwaved or independently explored.
- External theological ideas? Not relevant.
- Souls as energy sources? Up to you.
- The role of souls in magic? Defined by the magic.
- How do demons or liches work? Whatever.
- The majority of other accreted contrivances added for flavour or to cover bases that don't have a narrative connection yet? Make it up yourself.
All of this extra stuff should be explored by the players IC, not codified in a book of metaphysics.
Feel free to ask if you have any clarifying questions. However, be prepared to get answers that could include 'Your character doesn't know,' 'It doesn't matter,' or 'Great question! How about you decide the answer and write it into the IC.'