Note: I'm explicitly not committing to which theory is true. Any of them, none of them, or all of them could be true. No form of divination has ever even gotten a meaningful answer to this question. It's like asking "is the sky blue" and getting "the sound of a heart beating" as an answer. Except with much more brain burn and madness.

Theories abound about the eternal fate of the soul. Here are some of them.

Some concepts and terminology is shared among the entire western world. 
First, the three-fold soul (Spark, Nimbus, and Body). The Spark is the creative core, the core identity, the home of the will. The Nimbus is the spirit and mind, the home of the memories and outward personality, the part that feels. The Body is the physical shell, the home of the emotions and senses.

Second, the transitions that can happen to a soul as it leaves this mortal plane and becomes other. These are:

  • Bodily Ascension: the physical transmutation of a body into the stuff of another plane, resulting in a 3-fold being with all memories and personality intact. This is super rare and does not happen by accident. The specific names for the planes are
    • Astral: Apotheosis
    • Elemental: Transfiguration
    • Shadow: Necronification
    • Abyssal: Entropeosis
  • Attunement: the post-death migration of a soul who has accumulated a significant imbalance of aspected anima. This is still rare--only those who are steeped in the stuff of one plane or another (or who die to a massive overdose of one particular type of aspected anima) or who are pulled one way or another by an entity of one of those planes. It is believed that while the basic personality (the Spark) survives, very little of the Nimbus (and none of the body) survives this migration, so an attuned soul does not retain memories of their past life.
    • Astral: Exaltation
    • Elemental: Ascension
    • Shadow: Death (the normal transition)
    • Abyssal: Damnation

Third, most people agree on the immediate after effects of death.

On a scale of minutes after life ceases, the spirit (spark and nimbus) depart for the Shadow realm, slipping through the many cracks. Until this happens, raising someone from the dead is relatively simple and has virtually no chance of failure--all that's required is to repair the body enough and stuff the spirit back in it. If they died of old age, they'll immediately die again, but...

Once in the Shadow, the soul sets about a pale imitation of life on Earth. Those with particularly strong attachements may linger between the Shadow and the Mortal, becoming a ghost or specter. Most, however begin to fade as their anima disperses back into the Shadow. When the nimbus is beyond repair, the Spark departs. This may take days, months, or years. Raising a dead person at this stage is possible, but much more difficult and prone to failure (if the spirit no longer wishes to return or has had its nimbus consumed by a Shadow predator or living undead or demon, for example). Generally, only the strongest powers (often requiring divine intervention) can return a soul that's been dead for more than 10 days to life. There are rumors of magic that can return a soul dead for centuries, but only rare souls can survive (and many sages opine that it actually creates a new soul that merely shares the memories of the old one). Beyond that is the stuff of legends.

The other post-death planar attunements may happen immediately after death or may happen some time into the dwelling in Shadow. But they're rare (with bodily ascension being rarest of all).

Fourth, it is well known that abyssal creatures or blood magic can destroy a soul, spark and all. This is called extinction. It is also well known that doing so results in the contamination of the area (and the participants/bystanders) with abyssal-aspected anima.

But where do new sparks (for babies or for kami or for whatever) come from? Where do sparks go after their nimbuses evaporate in Shadow? No one knows except possibly the gods, and they're not talking.

This has not stopped mortals from making theories. These are the major ones in western Noefra; they form the cores of most of the religions and philosophical traditions. Each one has a common form and several offshoots, usually more radical in some sense than the common form.

Cycle of Rebirth
Popular among the more philosophically inclined, this theory posits that Sparks are individual fragments of the Dreamer and are eternal (unless extinguished). Most Sparks in existence have been here since the beginning, and endlessly cycle through birth, death, and rebirth. A few are taken out of the flow through one of the processes above. This is temporary in most cases--eventually their duty will be complete and they will pass back into the flow.
What they return as is essentially random, although greater sparks tend to be reborn as greater creatures. Not all traces of the prior life are purged--traces of the personality still linger into the new incarnation.

This theory does not have a concept of "sin" or "virtue". It encourages people to live and experience, to strengthen their sparks so that when they return they can live in the higher beasts.

According to this theory, the number of souls changes only when one is extinguished. There are a host of souls out there without bodies, waiting in timeless sleep for a new body. But each soul extinguished is permanently lost. Thus, consorting with demons is the only true sin.

The more radical versions of this theory preach that people should search out new experiences, even if those experiences defy the current dogmas of the authority figures. Everyone should find their own truth. Some variants edge quite close to pure hedonistic dissipation, seeking physical sensation and novelty through alchemical substances and ever more outre thrills.

Orthodox Linearism
This theory, popular among the common folk and those devoted to the Seasons, claims that sparks are created by other sparks through love (the first ones having been created by the Dreamer), and that Peor Fala inserts these wan sparks to new bodies, kindling them to life in the womb. As the child grows, the Dawn Lady fans the flames of growth, the Sun Lord urges them into full growth and the creation of new life, the Lord of the Harvest reaps them, and the Merciful Lady accepts the sparks with their burden of grief and joy into her House in the Shadows, where they unburden themselves until they are ready to make the journey to the Celestial Core, where they join with the Hearfires there, strengthening the universe.

Sinful souls, those with large burdens of debt, must spend longer in the Shadows and must have the sin purged painfully from them before they can rejoin the Heartfire, lest they contaminate the flame's purity. Sin is that which causes grief to others or the self, that trades future joy for present pleasure--the gods teach mortals the way to avoid sin and promote virtue. 

This theory posits that each spark only lives once, and that once a spark is gone, it's gone for good (but if it reaches the Hearfire it enriches the universe as a whole, so extinction is a horror and damages the universe itself).

The more fanatic versions of this theory preach that a primary source of sin is defiance of authority and breach of hierarchy. The goverment must live according to the words of the Gods, but the people must follow the government and their social superiors wherever they lead without question. This authoritarian view is most common in the rural areas of the Sea of Grass and among the ecclesiastical hierarchy of the Stone Throne.

Volnan Heterodoxy (Heresy)
This notion, popular in Byssia but considered heretical in other regions, is that all sparks (kami or human) are but ephemeral waves in the sea of the Dreamer's thoughts. Just as a wave continues for a while and rejoins the the sea, while not being truly separate from it, a spark believes itself to be separate from the universe, while not truly being separate. When the spark dissipates after death, it is merely rejoining the collective unconscious of the Dream itself. The gods and those they choose are those burdened with guilt for what they believe were sins; they have delayed their return to the Dream to work to maintain this illusion called reality. They are powerful, but not praise- or worship-worthy.

This theory and its practitioners proptitiate ancestor spirits as those who have delayed their own returns to bless their decendants here in this illusion. Why the difference between those and the gods? One delays their return to bless others. The other delays it out of a false idea, a delusion. They claim that the gods are actually self-enslaved due to false beliefs--they consider the gods to be mis-informed, not evil. So worshiping the gods isn't wrong, just pointless.

More radical variants preach opposition to the gods, that by tearing down the whole divine structure we can end the illusion called reality sooner and bring everyone to see the truth, to participate in an endless unity. Those who espouse these variants are usually considered mad and are shunned, even in Byssia.

Secular Radicalism
This view was championed by the technocrats of the Western Empire just before it fell. The Imperial Sons have resurrected it, but only espouse the more radical versions in private, as it is highly unpopular.

This view is that sparks are a phenomenon that happen whenever enough anima congregates in a particular place. There's nothing divine or special about them--when the person dies and the nimbus fades, the person is gone. Like sparks from a flame, they say. So why not use some of those sparks to create useful things? 

The milder versions of this belief do accept the existence of a Dreamer, but claim that he's a bonfire giving off sparks, so more or fewer doesn't really matter. Those who espouse the milder versions believe that since this life is all that there is, we should use it carefully and seek power to aid each other. They tend to take a utilitarian view of good and evil--the needs of the many are a strong balance to the desires of the few. They stop short of blood magic, but certainly are at home with soul transfer magic and binding planar creatures to their service (even unwillingly). 

The radical versions deny the Dreamer--to them, everything is an accidental construction out of nothingness and that as such there is no evil, there is no good. There is only power. And weakness. While the belief is not intrinsically malevolent, many people who adopt this view do so as a justification for a power-hungry, consequence-denying lifestyle. If there's anything the Imperial Sons are known for, it's a search for power and knowledge without regard for the collateral effects of that search. Practitioners of this view only worship gods if they can get something out of it. Power is all that matters--the strong can enforce their will on the weak. So it's best to be strong. 

These harsher versions have essentially no scruples. While they avoid abyssal rituals in populated areas (because those would draw the attention of the authorities, including astral ones), there are rumors that they are heavily involved in the kinds of research that sparked the downfall of the Western Empire and the 100 year civil war that followed.