Worldbuilding is not a story
Worldbuilding for the sake of worldbuilding has no end goal. How will you ever know if your worldbuilding is 'good', or 'good enough', much less 'bad'?
Even worse, how do you know when to stop? If you don't understand the end-goal of your worldbuilding (any task, really), you won't feel confident when you have completed it. You will stare at it doubtfully, turn it around, push it up, slump it over..., and never be sure what you are suppose to... feel.
That's because worldbuilding, on its own, doesn't mean anything.
What you have here is not a 'story' yet. This is Writing so we're going to push you to write an actual story, not just making up magic systems for the jollies of self-creativity. You have already done that part and it's fine, certainly 'good enough' to get started.
Put another way, I don't see any problem with this idea. It is interesting and easy to understand. Why not?
Judging 'worthiness' by your own criteria
Your stated criteria is 'eerie'. While we don't do opinion critiques here: SUCCESS!
Applying 'refrigerator logic' (thinking through some scenarios that would occur under this worldbuilding) I quickly come up with many dystopian vignettes which tingle my innate sense of moral right-and-wrong, injustice vs retribution, free will and consequences, the purpose of life if lessons are erased, etc.
I can construct a 'house of wax' where these vignettes play out, eternally mocking my moral compass. At the same time the whole thing seems 'managed' so who am I to judge? To say it is incorrect means proving any system I'd prefer is more correct, and I can't be sure.
The lingering feeling is unsettling, but not urgent. I think that fits the definition of 'eerie'. In my opinion, you have achieved the goal and can move on from the worldbuilding phase.
Story is why worldbuilding matters
So the next phase is figuring out what to do with this world. How do you storytell this idea so it is not just an exposition dump in a few paragraphs as you wrote here.
Based on what you've told us, I think you have enough to write a very short story (a dozen pages or less), the type which is a reveal of the scenario without a protagonist or conflict. Ray Bradbury's There will come soft rains is a good example. The 'journey' of the story is like a dark ride through the scenario, focusing on one thing, then leading to the next, slowly building a complete picture of what has happened without ever directly saying what has happened.
Presumably, as in your description, the final spotlight 'scare' of the dark ride is the 'shade domain' where we learn what has become of all that vanquished negativity... it works narratively as a long set-up and pay-off. Keeping with your theme of 'eerie' there would be no direct explanation of this world, no lore, no backstory – just a sequence of unsettling vignettes we can do nothing but observe. This minimum story structure is not sustainable for more than a few pages, so you could start writing a first draft and see how you might reveal the horror of this world, step-by-step.
If you want a longer story, you will need a protagonist and a conflict. It would be off-topic to explain those, but (very briefly):
potential for a protagonist:
- someone who is new to this world
- someone who is in conflict with this world
- someone who has the power to change this world, but doesn't know it
potential for conflict:
- truly evil people are helpless vegetables now, and someone is bumping them off (somehow, even though everyone is already dead? idk, it's a mystery to solve)
- inversely, the truly evil shade-people are fully coherent and functional, but even worse after having their good-selves removed (they might organize and try a coup, standard mythology plot)
- How does this place stay 'managed' anyway, and what could alter the status quo?
I'm not telling you what to write, just trying to prompt your 'story brain' into how this world might stay interesting for longer than a few pages and a reveal.
Applying any of the above suggestions should start to imply a narrative structure by suggesting some basic story arcs. A little bit of plotting to 'fix' those arcs in a logical order, will feedback onto your worldbuilding: what you need to reveal, and when.
Again, I think your worldbuilding idea 'has legs' if you choose to develop it into a real story. I hope you do.