I'm a fan of this mod, and I have some suggestions for it.
I saw someone mention visible differences between regular mobs and possessed ones, and I liked most of it. But I think this should either be configurable or... when you start the game, you cannot see any difference, but if you die and choose the path of a spirit, you will be able to see the difference. (even in human form, because when you die you're just gonna become a spirit again)
Soul traps: I think there should be an item called a "soul trap" or whatever you choose to call it. It needs to be placed on the ground, and if linked up with other traps it can be used to create larger traps. (so if you place four in a square shape the entire space becomes soul-trapped) This would change depending on the size of the area and how many traps it is lined with.
I also think a dimension would go good with this mod. You were talking about mobs that kill you and send you to the nether, but what if you got sent to this whole new dimension? It would be like limbo. Dark, dangerous to a soul, and lifeless. In here you would lose all special soul abilities, and would have a soul rank of 5. This would be like having 5 kills. If you die in here, you lose one and become weaker. You can sense the soul level of nearby enemies (random humanoid souls with random soul ranks from 1-??) Killing a soul gives you a certain percentage of its soul rank. To escape you need to get ?? number of kills before you regain the ability to fly and can fly into the sky, which teleports you into the overworld with instant 20% attrition. If you hit rank 0, you lose. In a hardcore world you would be stuck in the limbo world with the ability to fly as a small round spirit, so not humanoid, but you would never be able to leave the dimension. In servers I think fellow players should be able to summon your weakened soul to the overworld, and with some sort of ritual reinstate you as a full spirit. This would not be good, however, as you would lose all soul skills and abilities and only be able to possess basic entities like zombies and skeletons. I also believe reaching 100% attrition should NOT end the game in hardcore mode, but send you to the dimension.

I'm a fan of this mod

Thanks for the support !

visible differences between regular mobs and possessed ones

We don't currently think this should be necessary, it seems more interesting to try to distinguish mobs and players based on their behaviour.

soul traps

What exactly would this do ?

dimension

We consider a similar dimension to exist virtually in the lore (dimension from which all Requiem souls come), but we do not expect it to be implemented anytime soon, if ever.

Sorry, ideas were coming in one after another so they got a bit jumbled. As for the traps, I was thinking that they'd stun, hurt, or kill your spirit directly. This would depend on the type of trap, (I'm thinking like chalk symbols or things like that, maybe made with a special crafting station?), and if they step directly on it or in an area it is protecting. So you can cover an area by only having the corners market out, but this wouldn't be too effective. You should also be able to have different kinds of traps with different tiers. So maybe alarm traps that hold the spirit in place while firing off alerts. There could be traps for basic in game effects, but there could also be ones that do specific things to hinder a soul, like block abilities. These would be for mostly pvp, and rarely spawn naturally, I'd assume in some sort of structure.
I was thinking, to make this chalk you would need some sort of mineral (new block?) and a "soul shard/gem" (like elder scrolls), to get these, you would need an empty soul shard. These would drop either from some new or existing creature, an ore vein, or some be attained in dungeons. When something is killed by an item with the soul trap enchantment, (lvl 1= "If an entity is killed by the blow of this weapon a soul gem will be filled", 2= If an entity dies within 3 seconds of being hit a soul gem will be filled" and so on), you then get a soul gem. Using this would make soul chalk of varying levels. Higher levels meaning better soul traps.

Another thing:
I saw post from three years ago discussing reapers. But what if... instead of multiple reapers, there is just one. A generic skeleton with a scythe in a dark cloak. It functions like Ice and Fire's dragons, never truly despawning. It would be stupidly, INSANELY overpowered with the ability to absolutely WRECK any spirit that it came across. It could be attracted to spirit players the more they mess with villagers? Like the way iron golems work? It would always keep the same health, never healing. I mean this because it would be god like, and can only die once in a server, unless commands are used to respawn it, or a ritual, maybe? I think it should drop its scythe; a weapon that is able to be used by both a spirit and regular player. Tied to the account so it doesn't go away even if you die. There is only one because it should come with the reaper's insane pvp abilities.
I think the only way to get rid of the scythe would be through a ritual of some sort to respawn the reaper.

I like the reaper idea, it could use a nerf but yeah, it’s cool.

I like the reaper idea, it could use a nerf but yeah, it’s cool.

Well, there is only one. That includes servers. So, this thing prioritizes certain souls that are causing more issues. This means that most people won't have an issue with it at all, the only people who are going to have issues are those who are harming lots of villagers and stuff.