The Staff of Creation was providing the endless energy supply to keep Atlas afloat. Atlas shakes when the Gravity Dust reserves kick in.
Team RWBY figured out the loophole in the Relic of Creation's abilities.
Whatever is DIRECTLY created by request will always disappear, when something is created after it.
However, side effects and consequences of what is created will remain.
This allows them to give Penny's soul a human vessel; while allowing her leftover programming and mechanical body to succumb to Watts virus.