The seed file is created in the CAD application, not in ArcGIS. They can be useful if you want to have a predefined set of layers/levels or things like shared cells/block definitions. For DWG/DXF, you don't need to create a seed file. For DGN, it is required.
Seed file from
Export to CAD—Conversion toolbox | ArcGIS Desktop
Seed_File (Optional) | An existing CAD drawing whose contents and document and layer properties will be used for all new output CAD files. The CAD platform and format version of the seed file overrides the value specified by the Output_Type parameter. If appending to existing CAD files, the seed drawing is ignored. |
Do you need to make a seed file? Usually I find that the CAD operators are who use and manipulate seed files. I have never used GIS to make one.
The seed file is created in the CAD application, not in ArcGIS. They can be useful if you want to have a predefined set of layers/levels or things like shared cells/block definitions. For DWG/DXF, you don't need to create a seed file. For DGN, it is required.