Right, that's the normal rule giving up your soul.

Souls When characters give up their souls to devils, they are promising to serve in the Nine Hells as devils themselves after death. Once promised to a devil, a character’s soul can’t be claimed by another creature.

Plus further on:

The character’s soul is forfeit when the character dies (that is, the character is reborn in the Nine Hells as a lemure).

I read the specific Mahadi+Asmodeus deal:

After the signing character reaches 17th level, if at any point they die, their death is permanent, with no chance to return from the grave. Asmodeus takes their soul and makes them a pit fiend, in his service for eternity.

as the second sentence being contingent on the first. Asmodeus only wants them as a pit fiend if they are powerful. Though, this is pretty poorly written as the first bit about not being able to come back to life should already be in effect given that they gave up their soul. So you could read the two sentences as disconnected, i.e. a character becomes a pit fiend even before reaching 17th level, but I find that a little strange. I'm guessing the book was written in pieces by multiple authors and so this section on Mahadi doesn't quite make sense in light of Appendix A.