I'm not quite sure what you're asking, but I think my answer is: the same way. I'm only suggesting that the gods are creating more of them than there used to be, or at the least that's their goal. They observed a decline in the strength of souls over time, recognized it as an inevitable crisis and went about trying to solve it. Strong souls are associated with strong character:
Spiritual fracturing doesn’t contribute to a person’s negative disposition, but is believed to have a subtler effect on their life’s vibrancy and potential. Heroes, brilliant scholars, and charismatic leaders are generally considered to have old souls that are well preserved.
It's my supposition that the Engwithans attributed the decay of souls to the decay of kith civilization. Immoral people, people weak of character, were creating weaker and weaker souls. Religion was identified as the problem and the solution, and we all know the rest.
And just a reminder of why I brought this up, in case that's been lost: it reconciles everything we know about the Wheel and reincarnation without it being a retcon, and without the gods lying or being wrong.
What I'm asking is how the original kith with those strong souls reproduced? Your answer presupposes that death proceeded reproduction; one of the beings with those strong souls must have died in order to allow its soul to be fractured before any of the other beings could have engaged in biological reproduction.