1) Yes, it is powerful.
So is everything else. Steal Breath is well within the power levels available.
If your starting initiate spends 3 POW, they can be maintaining spells for a year - so Find Enemy, Soul Sight, and Spirit Block for everyone, plus 6 cult specific spells. Say for BB, Axe Trance, which if backed by a 10MP enchantment (that you can easily get as a starting PC) allows your Axe skill to be increased to ~480%, ensuring automatic Special Attacks and Parries.
2) This is the Bronze Age, and people believe in reincarnation. Therefore, no one will care about the environmental effects. The idea that humans can permanently alter the environment will not occur for thousands of years. If someone is worried about you, they'll get an Initiate of Storm Bull to Sense you for Chaos, and if none found, assume you are fine.
3) Steal Breath is next to useless in combat.
The target gets a POW x 5 roll to be holding their breath (arguably you could get around that by targeting someone who is yelling a battle cry). *IF* they fail, they start taking 1d8 damage a round unless they make a CONx1 roll. If they are close enough to hurt you, they'll do more than that to you and make you fail your INTx3 roll. If they aren't, they simply retreat out of range.
4) Steal Breath is useful during sieges.
So long as no one nearby has Dispel Magic, targets will need to use Dismiss Magic to get rid of the spell - each time. As it usually takes 1 day to regain 1d6 Rune Points, a single Sorcerer can tie down dozens of initiates. Sitting in a fortress, attacks can be hurled in any direction, making it hard for the attackers to protect everyone using Spirit magic.