Question: Should Buddhists light incense sticks, burn joss papers and offer food to wandering spirits (孤魂野鬼) when they are ‘released from the hells’ (地狱) during the seventh lunar month?
Answer: There are misconceptions in the question. There is not a single hell-being (地狱众生) released from the hells during this month for a break. The hells are a realm with extreme suffering (极苦) due to heavy evil karmas (恶业), that are so serious that hell-beings will not get time off from the hells until their evil karmas exhaust, without need to stay in or return to the hells. Just as prison inmates in this human world with negative karma do not get even a day’s holiday annually, it is impossible for hell-beings to get a month’s break.
Hell-beings are not the same as bardo beings (中阴), hungry ghosts (饿鬼) and wandering spirits, who might all be around us in everyday life now. Hell-beings cannot interact with human beings in the human realm.
Since there are ghostly beings around us in everyday life, food offerings, Dharma guidance (佛法开示) and meritorious virtues (功德) can be offered to them, along with all other beings in everyday life, not just for a month annually.
There might seem to be ‘more’ supernatural activities during this period due to many offerings being made for them. Just as many humans will naturally gather for free food, ghostly beings will too, thus increasing possibilities of having supernatural encounters.
Ghostly beings do not benefit from burning of incense sticks and joss papers as what needed are physical food and spiritual guidance. Burnt incense cannot be consumed by them and burnt money cannot be used by them for buying anything anywhere.
What Buddhists can practise is as summarised at https://purelanders.com/2012/06/25/general-buddhist-pure-land-practices-during-qing-ming-ullambana.
