The Ascians going forward

[Alleo]

I can't find a source for the notion of souls breaking down on death; the closest I can find is the first Encyclopedia Eorzea describing souls going back to the Lifestream, but there's no indication that they don't remain intact.

I do remember that this was in the game. It was the scions, mostly Minfilia telling us how it works. That when someone dies its aether becomes part of the land again and rebuilds into something new from the whole aether. I remember that because I really disliked it at that time. I dont like it when we find out how death and afterlifes works in a story because it takes the mystery away. And I like it even less when it means that there is no afterlife. So yeah in the past it seems that the scions understanding was that souls are reformed after death.

[KageTokage]

The original explanation about how Ascians cheat death suggested that part of the soul remains intact after death and it's that part that gets recycled while the rest of its aether is simply dispersed. It's because Ascian souls don't get compromised in absence of a physical body that we have "shatter" them so that the Lifestream can reclaim them properly.

As far as the cycle of life and death goes, there may not be an afterlife but there are still some mysteries like where souls come from and what happens to the memories that are "cleansed" from them that are still unclear.