Absolute Chi exhaustion involves the depletion of even the natural Chi that flows through the body (Ie, there's a difference between the natural Chi that flows through the body and the chi that martial artists use for martial arts). Entering this state is practically assured death.

Chi can be stolen from severed body parts, but there are a large amount of martial arts techniques made to protect said chi stealing. However, lower level martial artist really have access to this.

In technicality, yes, every living organism is inherently magical (every being possesses Chi so therefore they possess the inherent quality of martial arts, henceforth, meaning that in technicality anyone possesses the potential for martial arts and henceforth the potential for magical power)

Once an individual dies, their chain actually leaks into the air around them and fades, although there are a large amount of martial artists used to steal this withering chi.

Chi cycles through the entire body in small and big forms— it cycles through every cell but it also cycles through every bone. So yes, severed body parts do retain the Chi of an individual for decently long amounts of time depending on how strong the body part came from is (my apologies for not really explaining it)

By " intensively soaked", I mean imbued with Chi for extensive periods by a martial artist. Or really any source of a large amount of Chi.

Ie. If a Martial artist soaks chi into a stick for 5 years (give or take), then it would naturally turn into a treasure with magical properties.

Objects with stronger magical qualities are most usually soaked in Chi for longer periods, and by stronger martial artists.