True, but the Blade of the Black Empire seems to be a tool created for that purpose that was used on Xal'atath for whatever reason. From my understanding it was probably created to deal with rogue Old Gods or beings created by the Void Lords that would defy them.
It doesn't kill them, but it traps their essence so their body probably just rots away.
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Depends which old god? If Xal'atath truly was once an old god then we are doing her a favor by pushing back the rest of the Old Gods that captured her and leaving the spot open for her to take over the Black Empire (and if N'Zoth gets captured in the blade he could possibly in the future get a humanoid body)