[@Cyclone] I been holding this back, but I think it is important to just propose an alternative instead of simply dismissing the opposing idea. My idea to square the concept of having infinite souls and giving Kath an important role is fairly simple, have it so that the burning process is what increases the sum total of soul-energy. So the soul stuff that originally went into that person breaks down into ash, but so does their memories, experiences, etc. 

The reason I suggest this alternative is that it pull the focus away from no soul should ever leave the cycle, and allows for competing afterlives, while also maintaining Kath's afterlife and refocusing it on ensuring the cycle as a whole continues, rather than making sure that there is zero loss.