- Soulstones are described as a prison for spiritual beings. They hold their prisoner for eternity, unless the soulstone is destroyed or deactivated. (D1 manual appendix)
- The Three brothers´spirits are sucked into their soulstones, in which they are thrown into sleep and being guarded by the Horadrim for generations, without any trouble. When Leoric settles down on top of the soulstone, Diablo, in his sleep, is able to reach out to Lazarus and lure the man to destroy the soulstone. Diablo is awakened and free. (D1 manual)
- Diablo tries to posesss Leoric telepathicly, fails, then chooses prince Albrecht instead. The boy is brought before Diablo, so the demon can posess him directly, which succeeds and Diablo gets his embodiment. (D1 manual)
- After Diablo is defeated, he is shown to have his (unbroken) soulstone inserted in his body. The hero removes it and the body reverses into prince Albrecht again, with a hole in his forehead. That means that Diablo´s spirit is still in the soulstone and in order to posess a human, the soulstone must be inserted into the human body. The hero chooses to take the soulstone into himself in order to contain Diablo´s spirit, so that the demon, apparently, won´t be able to reach out again to some other human. (D1 ending)
- The hero is however overcome by Diablo´s spirit, gets posessed and Diablo wanders off to get his brothers (D2 manual)
- Diablo finds the imprisoned Baal in a tomb. Here is where the story gets interesting: Baal is in the possession of a body, which is shackled and has his soulstone pierced into the chest. Baal´s soulstone is removed from his chest, which disables his shackles and he is free. That means that Baal is not in the soulstone, but fully in his body and has no need of having the stone inserted into his body in order to posess it. The soulstone is taken by Marius and Baal will later hunt him down for it. (D2 cinematic)
- When the Three brothers unite in Kurast, Mephiso makes his appearence; in a body with his soulstone inserted. So when it comes to Mephiso and Diablo, they must have their stones pierced into a body in order for their spirits to posess it. Baal however has his body posessed without the soulstone, seemingly without any problem. (D2 cinematic)
- Mephisto is defeated and his soulstone is retrieved, apparently with his spirit inside. We go to Hell and defeat Diablo and retrieve his soulstone, with his spirit inside. The two stones are destroyed at Hellforge, which does not set the spirits free as stated in D1. Instead the spirits are destroyed, according to Tyrael. (D2 gameplay, cinematic)
- The last brother, Baal, finds Marius and take back his soulstone. Then he carries it around his neck, but his body is able to change from a humanoid into a spider-like form. Finally Baal is defeated, but his soulstone is nowhere to be found afterwards. We do not destroy it in Hellforge, but still his spirit is stated to have been destroyed, just like the others. (D2-LoD)
The soulstones functions are depicted rather inconsistently throughout the games. They are intended as eternal prisons, but can also apparently function as a channel for taking energy from the Worldstone, which their creator should have thought off before using them on the most evil creatures in the universe.
And then comes the Black soulstone, which is intended as a super-catalyst to create superhumans. But apparently also can be used to capture every spirit of all the Evils, which are stated to have roamed the world for 20 years. Everyone of them, including the two who were destroyed in Hell... And not has anyone of them posessed any human, most obvious because they have no soulstones... which they didn´t need during the Dark Exile...somehow.
Retcons and plot inconsistencies are common, yes. But not necessary.
Feel free to correct this if I misssed anything.
Love and sharp axes guys!