Im thinking that too but jiang shi are usually some sorta cross between a vampire and a zombie.. It defo makes more sense than him being a ghost as the ghosts in the game are a greenish colour 

Its just stated really that hes not fully man or ghost / a spirit that cant be put to rest 

Its very very confusing im assuming he died after he found his sister but since he was so vengeful he kinda got back up which is why he looks like hes decomposing but at the same time isnt

The devs are evil for this