Souls are real– the human psyche possesses an undeniable spiritual component. The unseen world is a realm made of thought, dream, intuition, and feeling, and the soul lives there, albeit forever anchored to its body. Using radiometry, anatomists one day determine that the feelings and instincts of animals also have a footprint in the unseen world, but animals do not seem to invite possession or have capacity for the Magic in the way humans do. Upon death, it is thought that a soul may become something like a daemon. Prayer and exorcism both seemingly have an impact on this process.
The soul seems to be extremely picky about what sort of body it can anchor to. No homunculus has been invented which a human soul can inhabit stably, though some Magi have claimed this feat by technicality, i.e., by blending their original body with a homunculus. Polymorphism is never stable for the same reason, but ‘spreading’ ones soul between ones human body and that of a homunculus or animal is doable, in fact, it’s a specialty of certain cultures. It’s thought that death due to shock is due to the soul rejecting the body. The soul is partly responsible for healing– without the direction of the soul, healing is often cancerous. Demoniacs and those suffering partial soul loss cannot properly heal.
The soul has something to do with both Magism and magicianship. The souls of Magi are dramatically different than those of magicians and ordinary humans, though it would be wrong to say souls do not vary in shape or composition. Magi create spells in the unseen world using their outsized presence in that world– that is, their souls. Magicians merely must use their souls to coordinate with daemons in spellcasting.