Here the 1830 compositor initially rejected the occurrence of much before the semantically plural people and replaced it with many. He penciled in the change in 𝓟, crossing out the much (written as mtch by Hyrum Smith) and supralinearly writing many. Yet the compositor ended up actually setting much in the 1830 edition itself. Elsewhere he set two other cases of much people without change, so his ultimate decision to leave the much in Mosiah 29:7 is consistent:
The example in Alma 2:2 of much people has never been edited, but the much in Ether 8:2 was replaced with many by Joseph Smith in his editing for the 1837 edition (he marked that change in 𝓟). Similarly, here in Mosiah 29:7, the 1837 edition accepted the change of much to many that the 1830 typesetter had marked in 𝓟.
As discussed under Enos 1:21, the original text sometimes used much with plural nouns. Some cases have remained in the text; others have been edited to many. Besides the few instances of much people in the original text, there are 14 of many people, so both are possible. The King James Bible has 25 instances of much people and 20 of many people.
Summary: Restore the original much in Mosiah 29:7 (“the souls of much people”).