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Right now, the page lists that Mxy destroys spirits in the afterlife, when the page is actually taking place in the Phantom Zone. We see cameos from the Pre-Crisis versions of General Zod, Jax-Ur, Professor Vayox, Mon-El, and other various Phantom Zone prisoners on Mike Allred's page.
They're not literal spirits, but physical beings stuck in a dimension where they can't interact with or be seen by the regular physical world. The funny little guy basically just erased a bunch of living non-corporeal prisoners from existence, as he's wont to do to anyone in that story.
He does briefly pop into the afterlife later in the story, but doesn't demonstrate Soul Manip.
Here's the official Phantom Zone page from Who's Who: The Definitive Directory of the DC Universe #8, if you'd like a concise source for this lore.
They're not literal spirits, but physical beings stuck in a dimension where they can't interact with or be seen by the regular physical world. The funny little guy basically just erased a bunch of living non-corporeal prisoners from existence, as he's wont to do to anyone in that story.
He does briefly pop into the afterlife later in the story, but doesn't demonstrate Soul Manip.
Here's the official Phantom Zone page from Who's Who: The Definitive Directory of the DC Universe #8, if you'd like a concise source for this lore.