I'm looking for a specific game that I can't remember the name of... It's like Xbox or PS2 Era if I remember right, maybe XBOX 360? It's got a main character with a cursed energy sword weapon on their arm that slowly eats their life force, but you can fight enemies and have the sword eat their energy so it stops hurting you. There is a spirit dimension that you can go to any time, but automatically get sent to if your character dies as well. In the spirit dimension you can phase through glass and metal bars by walking up to them and pressing a button. You lose any special elemental upgrades your sword has when you die and go to the spirit dimension so you're discouraged from doing it unless you specifically need to do so for a puzzle. Sometimes things happen like some pillars get taller or shorter or things change shape in the spirit dimension and you can use that to get up to places that would be otherwise unreachable. Water also becomes intangible allowing you to walk along the floor of flooded areas.

The main world has elemental upgrades you can get, and once you unlock them you can swap between the elements at various nodes by inserting the energy sword into one of them and then the sword changes colors and properties.

Does this sound at all familiar to anyone?

Edit: Never mind, found the game! It was Soul Reaver