I found a recent study that claimed to offer experimental confirmation of a mechanism for cloud seeding to work:

https://www.pnas.org/doi/abs/10.1073/pnas.1716995115

> Despite numerous experiments spanning several decades, no direct observations of this process exist. Here, measurements from radars and aircraft-mounted cloud physics probes are presented that together show the initiation, growth, and fallout to the mountain surface of ice crystals resulting from glaciogenic seeding. These data, by themselves, do not address the question of cloud seeding efficacy, but rather form a critical set of observations necessary for such investigations. These observations are unambiguous and provide details of the physical chain of events following the introduction of glaciogenic cloud seeding aerosol into supercooled liquid orographic clouds.

Apparently the goal is to turn supercooled water droplets into ice crystals. This makes a more physical sense than what was my first guess, seeding condensation nuclei. But seeding condensation would release a lot of heat, since the heat of condensation is pretty big, while the heat of fusion is quite a bit smaller.