1. I spoke with one of the sales associates at Pacific Botanicals and she had never heard of Cayenne seeds being a problem and mentioned that they have had whole dried Habeneros in stock which had the seeds in them. I also looked through some of their herbal books they sell and could not find any references to seeds being a problem.
2. I spoke with Richo Tech (author of Making Plant Medicine) and he had never heard of Cayenne seeds being an issue.
3. I watched a few of Dr. Schulze videos where he talks about using fresh cayenne and he never mentions the seeds.
So I've concluded that this must be an old wives tale and I'm not going to worry about it. Thanks for all the responses.