Was wondering if I put some pulsing xenia in my sump how likely is it to spread seed into the display tank and how beneficial would they be to help with filtration
They are extremely good for filtration. The only issue is that you would need nothing but them, and a lot to be effective. Of course, this depends on the size of your tank and such. As for spreading to the display, I don't think you'd have much to worry about.
Just be mindful of the colony crashing. I was planning to do the same on a 65 gallon but I read a few stories of large xenia colonies inexplicably dying and crashing the tank.
You could have chaeto, too. I should have been more clear. I'm a firm believer in having nothing that will compete with other things for resources. If you have macro algae, it's best not to use something else for the same purpose. Otherwise, they whither and die because of competition. Does that make sense? That's just my opinion though based on my own observation and through talking with others and their experiences.