The group was led like they were cattle to the depths of the Fire Lord's dominion, down under a steep mountain, and further down its burrows. Through a cave system that looked so complex that it wouldn't be wrong to call it a maze.
The baleful Qi spread all over the cave system, invasive and devastating to anyone who is exposed to it for prolonged periods of time. It slowly eats away at one's vitality in exchange for filling them with bloating amounts of Baleful Qi.
The process was simple, it was like force-feeding the cultivators. Since they're shackled and restrained, they can't rotate their own Qi to battle against the Baleful Qi, and all they could do was take it in and suffer for it.
Once the Qi reaches lethal amounts, one of two things will happen, mostly the cultivators turn demonic as the pervasive Qi ruins their foundations and rebuilds their bodies forcefully and painfully into that of a demon.