My theory is that every previous avatar is "alive" in the Spirit world but they are hiding from Korra. That's why we see Aang helping out Tenzin in the fog of lost souls. He is enjoying his new freedom, hanging out with Iroh and shit.
"Beyond the Horizon"
Book 4: Chapter 13
Written and directed by Cloud Strife.
*Korra walks into the Spirit World*
Roku: SHIT.
*everyone hides*
Korra: Oh, real mature guys.
Kuruk: Go away!
Aang: We're on vacation!
Korra: I need your help you asinine fucks. We gotta save the world.
Wan: I'm through with that shit. Plus, you hurt Raava.
Kiyoshi: Yeah, and you lost to Kuvira in the AVATAR state? You suck!
Korra: I'm sort of having mental issues right now, so if you could just-
Aang: My ass! I had to deal with so much more than a little poison and a crazy mole lady. Plus I had three kids!
Yang-Chen: Korra, please leave. You don't need us to beat Kuvira.
Korra: *sigh* I didn't want to have to do this...Raava!
*Raava comes out*
Everyone: SHIT!
Raava: Come here children.
*Raava proceeds to beat the living tar out of all the past-avatar spirits*
Korra: That's what I'm talking about. Now get inside me.
*All the avatars fuse with Korra again. She leaves the spirit world and confronts Kuvira*
Kuvira: Did you put on weight?
Korra: STFU mole-lady. Imma end you.
Kuvira: Oh? Last time you even went into the avatar state and I still rocked your shit.
Korra: Yeah, not this time. Observe!
*Korra goes into the Avatar state, and spiritual manifestations of all her past lives come out*
Aang: Charge!
*all the past lives charge Kuvira and tackle her*
Kuvira: Wtf is this?
Kiyoshi: Get her Korra!
Kuvira: Bataar Jr., save me!
Bataar Jr.: Nah bitch, I realized you were crazy last episode and I'm too busy crying to my mommy and daddy about how wrong I was. You're on your own.
Kuvira: Zhu Li!?
Zhu Li: Nope. I wanted to be Varrick'd all along. Betrayal successful!
Kuvira: Opal!?
Opal: Damn it, Kuvira! You were supposed to wait until the end of the episode! Now everyone knows! Wow.
Kuvira: *insert blasphemous curse word*
Korra: Bye bitch.
*Korra pulls out .22 Winchester Magnum and double taps, shit is edible*
Korra: I'm the Avatar, and you gotta deal with it.
*Korra puts on sunglasses and makes out with Asami*
-THE END-