Spirits are supernatural beings but not exclusively. They were non-physical entities like ghosts. But when Kagemitsu Daigo made pact with the 48 Demons. The spirits brought back and trapped in their physical body. The only way to free them from their physical form is to kill all the demons even if means for the Land Of Daigo's destruction by Hyakkimaru. After all the demons are slain, the spirits are assumed to be freed from their physical forms.