Steal Spirit takes a Spell Trait from a Champion. If the Champion doesn't have a Spell trait that your Sovereign doesn't already have, you just murdered the poor guy for no gain.

A screen will pop up showing the Spell traits possessed by the Champion to be drained if he has any, allowing you to choose from amongst them.

Right, what Nighthawk said. Basically, it's the same as reading a Spellbook, but with the added ability to gain Life or Death magic, as well as any of the 'mancy traits.

I used Steal Spirit again, on 2 additional champions, and the last one actually gave me a skill to pick. So yea, now I know.
It would still be nice to have a message about it when you didn't get anything for using the spell, tho

Also, I agree with Alstein:
As the game progresses, I get champions now and then which I don't see any good use for.
At a certain point it's better to fill the army slots with geared units than with random champs, and that's when I think Steal Spirit is a (potentially) nice option.
If you are able to recycle skills from a not-so-useful champ, then you do at least get some value of those lesser champs.
When you don't get anything at all from Steal Spirit, and the champ itself isn't preferred for any kind of use, then it feels like you wasted your fame... It reduces the fun in getting new champs.