For ordinary people to successfully refine the Soul Banner into a Merit Treasure, it is undoubtedly an absurd fantasy.
First, from the diary, it can be seen that refining a Merit Treasure requires a large amount of Power of Merit, and even the Moral Sect must open the Merit Pool to have this foundation.
The user holding the Thousand Souls Banner must have harvested countless souls, committing staggering slaughter. It's already a great fortune if such deep karmic force is not suppressed by merit, let alone accumulating enough merit to refine a Merit Treasure.
Even if viewed from another perspective, is it feasible for a demonic leader to not act directly, but instead find someone with great merit to refine a merit Soul Banner treasure?
Clearly, this approach is also impossible.