The second half of the chapter is the book's only sustained treatment of spirits, and its position is careful enough to be worth setting out step by step.
When the world is approached by way of the way, its ghosts have no spiritual power. Then an immediate correction: not that they have no power, but that their power does not harm people. Then a second extension: and not only does their power not harm people, but the sage does not harm them either. And the conclusion, that since neither harms the other, power accrues to both.
The correction in the middle is the important part. The chapter declines to say that the spirits are absent, powerless or unreal, which is what a sceptical text would say, and instead adjusts the claim twice to keep them in existence with their capacities intact. What changes under good government is not the inventory of the world but a relation within it.
The final move is the surprising one. Having secured the people from harm, the chapter turns and secures the spirits from the sage, and treats the resulting non-aggression as productive for both sides. There is no exorcism here and no suppression of local cults, which were live options in the period and were practised by states that wanted religious uniformity.
That is consistent with the book's treatment of everything else. It does not propose eliminating what is troublesome, whether that is the not good in chapter twenty-seven, the enemy in chapter sixty-nine or the spirits here. It proposes removing the friction that makes the trouble.