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It will only work on a species that has a mutant form available. If the species has no available mutant species, the seed will be returned.
One disadvantage to using a seed is that the new life form will appear at random on the map. Water species will be in water and land on land but often they can be in an inhospitable habitat. They may appear in a location with little food or the incorrect temperature.
This can often create a quick extinction, but may be useful in capturing a rare species, especially if its parent species is about to go extinct.