The Legend of Korra - Book 2: Spirits

 Spoiler

Her spirit purified vaatu with waterbending. It is as it was said above, she could still bend everything.

Although...this is kind of a weird flow switch. Last season we were dealing with the fear of not being able to bend to now knowing we can bend not one but all the elements even without the thing that made you "the avatar".

Also what's the point of the avatar state now? It was to remember the experience of past lives. She has no past lives.

 Spoiler

The point of the Avatar State was to connect to ALL of the Avatar's inner power, which included all of the Avatar's past lives. However, one has to imagine that it also includes Ravah herself. That's why it made Wan more powerful as well. Ravah is the spirit of light itself, so you have to imagine she's pretty powerful. 10,000 years of Avatars combined with Ravah's power made the Avatar State so powerful. With no past lives anymore, there's still Ravah's power that the Avatar State connects to, so it's still useful. Just like Unalaq got powerful in the "Dark" Avatar State, even though there were no past "Dark" Avatar lives to draw power from. He was drawing power from Vaatu.