Liu Xing Huan Jian

Spiritual beasts are magical animals or other humanoid things that have affinity with the cultivator. Typically, they form a contract and the beast could then be summoned. It's not unlike the mechanism in Shin Megami Tensei or Persona games. These beasts are usually intended to be fierce, to be used as a last resort weapon, such that contracting a strong beast brings prestige, even, to the family.

Sometimes however, the beasts "lose all their power" and revert to a cute form that the protagonist keeps as a pet, sometimes not knowing their power at all.

Personally, I find this plot mechanic annoying, but some might find it endearing.