This is quite the observation, but it actually makes sense. Here is the source code: http://code.metager.de/source/xref/gnu/coreutils/src/seq.c

Firstly, notice the seq_fast function and the comment before it is called:

608 /* If the following hold: 609 - no format string, [FIXME: relax this, eventually] 610 - integer start (or no start) 611 - integer end 612 - increment == 1 or not specified [FIXME: relax this, eventually] 613 then use the much more efficient integer-only code. */

We see that they have a better algorithm when these conditions are met. Indeed, if we instead add an increment we get the same slower behavior because print_numbers is used instead of seq_fast :

time seq 1e9 > /dev/null seq 1e9 > /dev/null 4.68s user 0.09s system 99% cpu 4.770 total time seq 1 7 1e9 > /dev/null seq 1 7 1e9 > /dev/null 56.78s user 0.02s system 99% cpu 56.801 total

As for why formatting takes even longer (1 minute time with 1e8 instead of 1e9), notice that 53/10^8 seconds = 530 nanoseconds. So on average, format code (which has to run on every single number before printing) adds about 530 nanoseconds per printed number. Considering all the branching and complex logic involved in formatting, this makes sense too.