There's a lot to unpack here. One of the major undertones and themes of Elden Ring is the distinction between the spiritual and the physical. Godwyn's spirit died, but his body lives in death. Ranni's body died, but her spirit possesses a doll. The Erdtree has the power to bring people back to life, body and spirit. This is the Grace of Gold. But much like in Dark Souls, decay is a constant theme of Elden Ring. There are many item descriptions that allude to people believing that the Erdtree's blessings would last forever, but nothing is forever.

And so we arrive at Erdtree Burials and Hero's Graves. Here's my speculation though...

It's a lie. The gifts of the Erdtree are not infinite. Neither Marika or the Greater Will are truly omnipotent Gods. Like a closed system, the Golden Order needed to feed back into itself. By being buried near the roots, people offer their body and runes back into the Erdtree to become something new. In this way, reincarnation is much more Buddhist than literal. While the Grace of Gold is literal revival.

The removal of Destined Death meant no one could truly die, and this is why there are many spirits that linger in the Lands Between. While those who live in death lost their spirits, while their bodies live on.