The mental capacity of those without souls eventually deteriotes, causing them to wander the land as mindless husks. Those of sound mind lock them in the gated city called Necropolis.
If this city looks a bit messy, it's intentional. This is a full-blown dungeon, and those who attempt to complete it will find themselves walking on rooftops, weaving in and out of buildings, and putting out fires to make it out safely.