I am actually working on the Winter update, and I noticed I forgot to talk about what happened when you burned up the vile dead during the Autumn update.
So, to not just leave the thread in fallow will I write, and to correct my mistake, it is time to explain a little the quest's setting, and how souls work.
A soul, in Try to survive the Winter, is something that is both real, and multipart. Every living thing has a soul (and even some nonliving things), and the soul can be seen as a "spiritual body". A tree as the soul of a tree, with different "spiritual organs" and structure than a human soul.
And souls are hardy things. They are the main reason why things in the setting seem to never really die. You can mutilate and hurt a soul, but there is no widespread way of destroying a soul.
They are three main methods to deal with soul in a semi-permanent way.
You can bind a soul, prevent it from acting in any way.
You can break and devour a soul, integrating it until the "something else" becomes "you".
Or you can weaken it, hollow it out until it is the spiritual equivalent of an empty box. There is still a soul, but without any identity.
Fire combines the first and third method.
When you burn someone, their soul is burned with their bodies, and become bound to the ashes, quite traumatized and, in most cases unable to do anything.
Then, if you disperse the ashes, the soul is divided between each bit of ashes. Countless bit of bare consciousness and will, thinly connected to every other shard of the original soul. Completely powerless. And in many cases, still barely able to feel pain.
Burning is a good way to deal with truly vile things, things that deserve to be bound and broken apart, to be sealed forever in near-nonexistence and pain.
It is not a way to deal with the innocents, or the redeemables.
In universe, those information were discovered by Sara and the Freed will burning the Vile ones. The Vile ones probably deserved it, but they may have had a chance for redemption.