In Dawn of Sorrow, you can release up to 3 demon souls with Yoko per visit. What’s the point of this? Why would anyone get rid of their souls? As far as I know, the more souls you have the higher the level of the attack/buff, which would make this mechanic pretty useless.
Most of the souls just get better after leveling them up: more damage, larger area, greater buff...
But with certain souls, you can't just say if leveling them makes the ability better or worse, it's just different. For example, level 9 Persephone will make a Persephone appear with the vacuum and she will drain more HP, but she will flinch with every hit she takes. Level 8 Persephone will just summon a less powerful vacuum, but it's not affected by enemy hits.
Anyway, practically every soul is better when you max it up, I never used the soul release.