The Hollows which Muramasa absorbs are not killed in the process, but are instead stored within Muramasa's body. At any time, he can summon forth these Hollows to fight for him by exerting his red-black Reiatsu, which the Hollows emerge from.
Hollow Manifestation Anime Gallery
Muramasa emits his Reiatsu and the Hollows begin to emerge from it.
Hollows begin to emerge as Muramasa uses his Hollow Manifestation technique.