"Blah blah, yak yak," Willow said. "You don't know what I'm capable of." She didn't really care at this point if she could remove his soul or not - she had enough experience with soulless vampires to know that it wasn't something she wanted to try out anyway. Bad things happened around people (alive or undead) that didn't have souls. But she really didn't like how this jerk knew so much about her, and implied more.
"So did you want something in particular, or just feel like reassuring me that I can't hurt you? Or reassuring yourself. Kind of. Cause maybe you're insecure." Right. Lestat. Insecure. She might as well ask Spike if he liked holy water shots and tanning at the beach.