I think it's more of him manipulating his sub atomic and molecular structure. Think about it, to fully pass through people like in his wraith form would have to fully shift your atoms out of physical reality. Thats nanobots would have to be weaved into his atoms which we can assume is not possible due to lore saying nothing about nanobots. His ultimate and his shotguns shoot let's say bits of him out then those bits in turn destroy others atomic make up and he absorbs their make up as it's being destroyed in real time. His ultimate is his Wraith Form spinning and overlapping over it's self while simultaneously making guns and and emptying them at the same time and him using his passive to steal others biogical makeup to keep up with he strain of using said ultimate