User blog comment:Miskos3/Fairy Tail Chapter 374: Revolution, Review/@comment-121.54.54.138-20140307110430/@comment-7418318-20140307111621

Those things around his face look too dark to be flames to me, but Hades looked a lot like this when he cast that spell that created the Demon-like aparitions out of the rubble.

And looking at how closely Franmalth resembled Taurus at times, I think activating Atlas Flame's soul would make his body into a very different shape. That and Wendy commenting about his soul vanishing. Also how should he have gotten Atlas' soul?

For him getting Hades' soul I can come up with two explanations:
 * 1) His soul was the price for getting the Demon's heart and so after his death, instead of going to the afterlife, he ended up as food for Tartarus.
 * 2) Zeref didn't just kill Hades body, but also imprisoned his soul somewhere inside Cube and Franmalth thought it's an all-you-can-absorb menu.