Cursed Soh is not evil, she's just defilement.
Perhaps she represents Soh's desire for change after witnessing the defilement slowly destroy Yoshiro. Or about her own fate she suffered as Maiden since Cursed Soh is her literal body, the Spirit Stone.
Phantom Paths, the image in this context, suggests seeking change vs accepting the norm.
But why is it called Phantom Paths? Google Translates as it into 'Alleyway of Illusions' or 'Phantom Alley'
They're illusionary paths? Or is the illusion that they're fighting because in reality, they both have the same goal?
Why is Soh gripping her sword with both hands but Cursed Soh with only one?
Cursed Soh is unsheathed but Soh is unsheathing.
Or is it implying that NG was the Phantom Path we went on because NG+ is the true ending?