The Altar of Souls is a mystic construction added by the Harken Scythe mod very similar to an enchantment table, but with ender pearls instead of diamonds.
Instead of a regular book, a Book of Shadows is required instead in the top slot of the crafting grid, which can be made with a book, a feather, a gold ingot, and a filled Soulkeeper.
It must have a Soul Crucible two blocks away from it, or it will not draw souls from it.
The materials that are needed to construct the Altar of Souls is 4 Obsidian, 2 Ender Pearls and a Book of Shadows
To use it, you must first place atleast one Soul Crucible two blocks away from the Altar of Souls. When right-clicked (default) with a Soulkeeper or Essence Vessel with five or more souls in it. This will deposit five souls into the Soul Crucible. Right-click on the Altar of Souls and a GUI will open. An Iron Ingot, Book, or Wool of any kind but orange can then be deposited into the slot on the left. After clicking the "Imbue" that will then light up after placing the item. It will turn an Iron Ingot into a Livingmetal Ingot and Wool into Soulweave. Orange wool is likely to be unable to be changed because Soulweave is blue and orange is the opposite color of blue. Both Wool and Iron Ingots take five Souls to Imbue. It takes 100 Souls to "Attune" a book and make an Enchanted Book with a Soul-based enchantment.
If torches (or any other block) is placed like in the picture above the altar will not draw souls.
When you place something in the way, like a torch between the Altar of Souls and the Soul Crucible, 1 block above ground the Altar of Souls will not draw souls from the Soul Crucible.