Looks like you've got a baby sorcerer.
Oblivion's Embrace is a sorcerer short range spell that removes tags like NOPAIN, NOBREATHE, NOT_LIVING and adds HAS_BLOOD. Normally its function is to give him a chance to destroy hostile undead which an adult Sorcerer might have raised with other magic like wraithbinding blade-shards from his wraithblade, or a barrowlords dreamcatcher.
But in this case he's granting the Scarecrow Man his wish to transform into a real boy with a real heart. Just in time so he can cast Rite of Pain on it and maybe the little guy's pops can stab it a couple times so it bleeds out while it's rolling around in agony.
