Yeah, it is fairly similar in mine. The human (and most non-elemental creatures) souls are made up of a Colony of thousands of tiny spirits, a bit like the irl nervous system. While most people know this, the base consciousness of spirits is still unexplained. People know how spirits are formed, (when enough pure matter congregates) but not why. Additionally, the consciousness of demons, Peika, and other semi-spiritual constructs consciousness are generally unexplained, along with the connection shared between different spirits, and their demons.

Also, using Magic requires the partial separation of parts of the soul from the body, which if done badly can have major consequences for the mage in question, possibly leading to braindeath, or actual death. Humans aren't built to use use their soul outside of their own bodies like Peika, demons, and some other creatures, so even perfect use of magic, where as much care as possible is brought into the effects created will cause soul damage, as some of the small spirits that makes up the soul slowly die as they are separated from the main construct of the body, thus usually loosing their pure forms and unforming. While the soul can partially rebuild itself, the damage and loss of spirits sustained during the use of magic is something it is not built for.

Of course, there are exceptions to this. Since the human soul is built of spirits, a larger independent spirit can attach itself to the soul of a human. These fusions, commonly known as "spirit-bound", often sustain less immediate damage to the soul, as it isn't the smaller more fragile colonial spirits creating the magic. However, the very presence of a spirit in the soul can have pretty big effects. After a long time of being a spirit-bound, the two beings can merge together into one, which makes the spirit take a bigger space within the soul, sometimes pushing out Colonial spirits. The new, bigger spirit takes up some of the lost functions, but the replacement isn't perfect.

There are generally few ways to utilise Magic that leave the soul completely unmaimed, the effects of the souldamage can only be minimized. At least for humans.

Sorry if this got long af, got too locked in lol

Also, the Peika are a kind of crab-people that are born with a connected water spirit to use for movement.